Profitability analysis
Free IMA CMA Part 2 (Strategic Financial Management) lesson in Financial Statement Analysis. 13 min read, ~1,978 words.
ROA = Net Income / Average Total Assets; ROE = Net Income / Average Common Equity. Numerator and denominator definitions vary by analyst, so always state which version you used. Three margins from one income statement: Gross = (Revenue − COGS)/Revenue; Operating = OI/Revenue; Net = NI/Revenue. Revenue grows faster...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 2A3
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