Measure of how profitable a company is relative
ROE =
·
NI/TE
ROA =
·
NI/TA
Equity Multiplier =
·
TA/TE
Profit Margin =
·
NI/Sales
TA Turnover =
·
Sales/TA
ROE
·
1
ROA
·
2
Equity Multiplier
·
3
Profit Margin
·
4
TA Turnover
·
5
ROE is
·
a measure of the
profitability of a business in relation to the equity
ROA is
·
an measure of how
profitable a company is relative to its total assets
Equity Multiplier is
·
a risk indicator that
measures the portion of a company's assets that is financed by stockholder's
equity rather than by debt
Profit Margin is
·
the amount by which
revenue from sales exceeds costs in a business
TA Turnover is
·
a measure of how
effectively companies are using their assets to generate sales