Business
Engineering
Math
Science
Social Science
Identify four measures of profitability calculated by FCI.
College Accounting, Chapters 1-27
Solutions
College Accounting, Chapters 1-27
Identify four measures of profitability calculated by FCI.
Identify four measures of profitability calculated by FCI.
Explanation of Solution
Profitability measures:
Profitability measures show the ability of the company to earn income by operating proficiently. These ratios focus upon company’s’ profit margin and “the relationship between key income statement and balance sheet amounts”. Profit margin, return-on-assets, return on common stockholders’ equity, earnings per share of common stock are the profitability ratios.
Profit margin ratio:
Profit margin measures the amount of profit earned for per dollar of sales. The formula to calculate the profit margin ratio is as follows:
Return on assets ratio:
This financial ratio evaluates a company’s efficiency in operating the assets to generate net income. So, ROA is a tool used to measure the performance of a company. The formula to calculate the return on assets is as follows:
Return on common stockholders’ equity:
Return on common stockholders’ equity is a tool used for measuring the performance. It is Computed by dividing the net income available to common stockholders’ and the average common stockholders’ equity during the year
Chapter 24 Solutions
Additional Business Textbook Solutions
Accounting Information Systems
Financial & Managerial Accounting
Corporate Financial Accounting
Financial Accounting
Financial And Managerial Accounting
Principles of Macroeconomics (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Foundations of Business (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Management, Loose-Leaf Version
Essentials of Business Communication (MindTap Course List)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Principles of Economics (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Essentials of Economics (MindTap Course List)
Contemporary Marketing
Financial Accounting
Accounting Information Systems
Intermediate Accounting: Reporting And Analysis
College Accounting (Book Only): A Career Approach
Financial & Managerial Accounting
Managerial Accounting: The Cornerstone of Business Decision-Making
MKTG 12:STUDENT ED.-TEXT
College Accounting (Book Only): A Career Approach
Accounting (Text Only)
Exploring Economics
Fundamentals of Financial Management (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Statistics for Business & Economics, Revised (MindTap Course List)
Pkg Acc Infor Systems MS VISIO CD
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Corporate Financial Accounting
Survey of Accounting (Accounting I)
Cornerstones of Cost Management (Cornerstones Series)
Practical Management Science
Economics (MindTap Course List)
Economics For Today
Microeconomics
Macroeconomics
Purchasing and Supply Chain Management
Managerial Accounting
Cornerstones of Financial Accounting
Macroeconomics: Private and Public Choice (MindTap Course List)
Understanding Management (MindTap Course List)
Micro Economics For Today
Microeconomics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
