MBU 652
Financial Decision
Making
Performance Measurements
Part 1: Profitability
Categories of a Financial
Statement Analysis
 Profitability
 Liquidity
 Activity
 Debt (Leverage)
Profitability
 Return on Assets (ROA)
 Return on Equity (ROE)
 Price/Earnings Ratio(P/E Ratio)
 Dividend Yield
 Divid...
Return on Assets (ROA)
ROA = ____Net Income___
Average Total Assets
Return on Equity
(ROE)
ROE = ___Net Income___
Average Owners’ Equity
Price/Earnings Ratio
(P/E Ratio)
P/E Ratio = Market Price of Common Stock
Earnings Per Share
Dividend Yield
Dividend Yield = Annual Dividend per share
Market Price Per Share
Dividend Pay-Out Ratio
Dividend = Annual Dividend Per Share
Pay-Out Ratio Earnings Per Share
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MBU652 Financial Statement Analysis - Part 1: Profitability

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MBU652 Financial Statement Analysis - Part 1: Profitability

  1. 1. MBU 652 Financial Decision Making Performance Measurements Part 1: Profitability
  2. 2. Categories of a Financial Statement Analysis  Profitability  Liquidity  Activity  Debt (Leverage)
  3. 3. Profitability  Return on Assets (ROA)  Return on Equity (ROE)  Price/Earnings Ratio(P/E Ratio)  Dividend Yield  Dividend Pay-Out Ratio
  4. 4. Return on Assets (ROA) ROA = ____Net Income___ Average Total Assets
  5. 5. Return on Equity (ROE) ROE = ___Net Income___ Average Owners’ Equity
  6. 6. Price/Earnings Ratio (P/E Ratio) P/E Ratio = Market Price of Common Stock Earnings Per Share
  7. 7. Dividend Yield Dividend Yield = Annual Dividend per share Market Price Per Share
  8. 8. Dividend Pay-Out Ratio Dividend = Annual Dividend Per Share Pay-Out Ratio Earnings Per Share
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