1. MBU 652
Financial Decision
Making
Performance Measurements
Part 1: Profitability
(with financial statement data from textbook)

2. Categories of a Financial
Statement Analysis
 Profitability
 Liquidity
 Activity
 Debt (Leverage)

3. Profitability
 Return on Assets (ROA)
 Return on Equity (ROE)
 Price/Earnings Ratio(P/E Ratio)
 Dividend Yield
 Dividend Pay-Out Ratio

4. Return on Assets (ROA)
ROA = ____Net Income___
Average Total Assets
ROA = ____107.2___
1591.7 + 1599.3 / 2 =

5. Return on Equity (ROE)
ROE = ___Net Income___
Average Owners’ Equity
ROE = ___107.2___
908.7 + 983.8 / 2 =

6. Price/Earnings Ratio
(P/E Ratio)
P/E Ratio = Market Price of Common Stock
Earnings Per Share
P/E Ratio = 90.00_(Market Price)
2.50 (EPS)

7. Dividend Yield
Dividend Yield = Annual Dividend per share
Market Price Per Share
Dividend Yield = _____.50_____
90.00

8. Dividend Pay-Out Ratio
Dividend = Annual Dividend Per Share
Pay-Out Ratio Earnings Per Share
Dividend = _____.50_____
Pay-Out Ratio 2.50