会计英语unit_12_Analyzing__Interpreting_Financial_Statements教材教学课件.pptVIP

3. Profitability ratios Profitability is the ability of a business to earn profit over a period of time. Profitability ratios include: ROE, ROA, Profit margin, EPS,P/E, Dividend yield, etc. (1) Return on Stockholder’s Equity Example Cingular has net income of $42,000, and the beginning balance of total equity is $200,000 and ending balance is 250,000. So, ROE is 18.6%. This ratio shows how many dollars of net income were earned for each dollar invested by the owners. (2) Return on Assets Example Cingular has net income of $42,000, and the beginning balance of total assets is