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6 Cards in this Set
- Front
- Back
- 3rd side (hint)
Gross profit margin
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(Sales - Cost of goods sold) / Sales
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shows the percentage of revenue available to cover operating expenses and yield a profit. Higher is better. Upward trend good.
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Return on sales (operating profit marign)
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(Sales - Operating expenses) / Sales
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Shows the profitability of current operations with ouch regard to interest charges and income taxes. Higher is better, and trend should be upward
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Net return on sales (Net profit margin)
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Profit after taxes / Sales
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Shows after tax profits per dollar of sales. Higher is better, and trend should be upward
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Return on that assest
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(Profit after taxes + interest) / Total assets
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A measure of return on total investment in the compnay. Higher is better, and trend should be upward
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Return on stockholder's equity
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Profit after sales / Total stockholder's equity
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Shows the return stockholders are earning of the investment in the company. Average return is 12% - 15%
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Earnings per share
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Profit after taxes / Number of shares of common stock outstanding
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Shows the earnings for each share of common stock outstanding. Trend should be upward, and bigger annual percentage gains are better.
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