Financial Ratios

When you wish to evaluate a company’s performance, the best method to use is ratio analysis. The ratio analysis uses financial statements such as the income statement and the statement of financial position. One of the critical components of the financial ratio is the current ratio that measures the relationship between the current assets and […]

Definition: Averages total assets is the average book value of the entity’s assets over the different reporting dates. Normally, the value of assets at the reporting date is shown in the balance sheet of the entity. These assets include book current and fixed assets. Averages total assets are normally used to assess the return on

Definition: Return on average assets is the profitability ratios that used to assess the profitability that an entity could earn or generate from the average of total assets for the period of time. This ratio use entity’s net income for the period of time that analyst want to assess and then compare to average of

Overview: Increasing or maintaining return on assets is one of the most important tasks that need serious attention from senior management of most big corporate companies. This is because of this ratio interested by the majority of shareholders, prospective investors, the board of directors, the management team, and staff. Yet, a group of stakeholders who