Ratios

Cards (2)

  • Profit Ratio
    Relates company's profits to business activity
    • how much profit is earned for every dollar of revenue earned
    • allows it's performance to be compared with other firms and previous performance from other periods
  • ROR on Assets
    Relates company's profits to the assets its using to earn that profit
    • allows comparisons with alternative investments of those resources
    • evaluate company performance against that in previous periods