Financial Analysis, Step 4 : Profitability Analysis
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Description
Is EBIT high enough? Is Net Income high enough? These two questions are addressed in order to try and judge on the profitability of the company we analyze. The speaker defines return on capital employed (ROCE) and net operating profit after tax (NOPAT). Another ratio is used to judge on the profitability : return on equity (ROE). Then he spends some time addressing the leverage effect.
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Published 03/14/12
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