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6 Cards in this Set

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Gross profit margin
(Sales - Cost of goods sold) / Sales
shows the percentage of revenue available to cover operating expenses and yield a profit. Higher is better. Upward trend good.
Return on sales (operating profit marign)
(Sales - Operating expenses) / Sales
Shows the profitability of current operations with ouch regard to interest charges and income taxes. Higher is better, and trend should be upward
Net return on sales (Net profit margin)
Profit after taxes / Sales
Shows after tax profits per dollar of sales. Higher is better, and trend should be upward
Return on that assest
(Profit after taxes + interest) / Total assets
A measure of return on total investment in the compnay. Higher is better, and trend should be upward
Return on stockholder's equity
Profit after sales / Total stockholder's equity
Shows the return stockholders are earning of the investment in the company. Average return is 12% - 15%
Earnings per share
Profit after taxes / Number of shares of common stock outstanding
Shows the earnings for each share of common stock outstanding. Trend should be upward, and bigger annual percentage gains are better.