In a business, there are valuable assets that are consumed, worn out over time. Such assets include vehicles, electrical grids, equipment, and buildings that the company uses for its operations.
Return on Sales (ROS) Index
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Return on assets (ROFA) is a measure of how effectively an organization uses its assets to achieve profit.
The formula used to calculate ROFA is
ROFA = P / Cs × 100% ,
Where
P is the company's net profit for a certain period;
Цс is the value associated with the largest assets of the organization.
Return on Current Assets (RCA)
Unlike the main assets, the current assets of the organization can be completely spent. These include stocks in the warehouse, various materials and cash resources that are used to produce goods, and other resources. To assess the efficiency of using current assets, the RCA profitability indicator is calculated.
The calculation of the return on current assets is carried out using the formula
RCA = P / Co × 100% ,
Where:
P is the net profit for the required period;
Цо is the value of current assets used during this time to produce goods or services.
Return on Equity (ROE)
The indicator reflects the bahamas phone data effectiveness of invested funds. ROE can be calculated for both equity and attracted capital, allowing you to evaluate the company's profitability and the effectiveness of investments in business. The effectiveness of the use of working capital is assessed based on the calculation of the return on investment indicator.
The formula used for this is
ROE = (P/K) × 100% ,
Where:
P — profit from operations;
K is the total value of assets.
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Alexander Kuleshov
Alexander Kuleshov
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Return on Investment (ROI) Assessment
This indicator is a key criterion for investment success, but it is not limited to cash investments, but is also applicable to investments in securities and bank deposits.
The calculation of investment profitability is carried out according to the formula
ROI = (P/Ci) × 100% ,
Where:
P — revenue from investments;
Qi is the value of investments.
Efficiency in production
This parameter is used in the analysis of the business activity of the company as a whole and is calculated based on the ratio of profit to the value of circulating assets and capital investments. It is possible to calculate the profitability of a certain line of business, a specific part of production or product.