NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
Financial statement
1. A type of analysis that examines a company's
Return on Equity (ROE) by breaking it into three
main components: profit margin, asset turnover
and leverage factor.
vikas vadakara
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. Earnings
Operating
Profit
Margin Return On
Income X = Assets (less
Stream interest
Asset adj.)
Turnover Return On
X =
Equity
Turnings
Financial
Investmen
Structure
t
Stream Leverage
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4. A manager has basically three ways of improving
operating performance in terms of ROA and ROE.
Such as.........
• Increase capital asset turnover
• Increase operating profit margins
• Change financial leverage
vikas vadakara