Financial ratios

Financial ratios

EBIT: Earnings before interest and tax.

Calculation Sales - Money paid to contributors.

- Rent.

- Depreciation. = EBIT. Earnings before interest and tax - Interest expense. = EBT. Earnings before tax - Tax = Net income.

Explanation EBIT is a profitability measure that excludes interest expenses and tax expenses.

http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/earnings-interest-tax-depreciation-and-amortizatio

ROA: Return on Assets

Calculation

Explanation

EBIT Total assets

ROA shows how effective your company is at using its assets to generate earnings.

Assets are, for example, knowledge libraries, websites, user lists / analytics, vehicles, cash, machines, and equipment.

https://hbr.org/2016/04/a-refresher-on-return-on-assets-and-return-on-equity http://www.investopedia.com/terms/r/returnoninvestment.asp