Financial statement

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Financial statement

  1. 1. A type of analysis that examines a companysReturn on Equity (ROE) by breaking it into threemain components: profit margin, asset turnoverand leverage factor. vikas vadakara
  2. 2.  Profit margin indicates how efficient the company’s management is in operating the company and in controlling costs. Asset turnover measures the efficiency of the company in generating sales for every dollar of asset. The equity multiplier shows how leveraged a company is by computing how much financing stockholders provided for every rupee of asset. vikas vadakara
  3. 3. Earnings Operating Profit Margin Return On Income X = Assets (less Stream interest Asset adj.) Turnover Return On X = Equity Turnings FinancialInvestmen Structure t Stream Leverage vikas vadakara
  4. 4. A manager has basically three ways of improvingoperating performance in terms of ROA and ROE.Such as.........• Increase capital asset turnover• Increase operating profit margins• Change financial leverage vikas vadakara

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