Furniture 1000 – a list of the largest furniture manufacturers in Poland
Furniture 1000 11 Return on assets ratio , often called the return on total assets, is a profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets. In other words, the return on assets ratio or ROA measures how efficiently a company can manage its assets to produce profits during a period. In short, this ratio measures how profitable a company's as- sets are. Return on sales (ROS) , often called the operating profit margin, is a financial ratio that calculates how efficiently a company is at generating profits from its revenue. The return on sales formula is calculated by dividing the net income by the net sales for the given period. Return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to gener- ate profits from its shareholders investments in the company. In other words, the return on equity ratio shows how much profit each dollar of common stockholders' equity generates. ROE is also and indi- cator of how effective management is at using equity financing to fund operations and grow the company. Debt ratio – another index included in the rank- ing – is defined as the ratio of total – long-term and short-term liabilities to total assets. It can be inter- preted as the proportion of a company’s assets that are financed by debt. The last index is current ratio . It measures a firm's ability to pay off its short-term liabilities with its current assets. The current ratio is an important measure of liquidity because short-term liabilities are due within the next year. net income total assets x 100% ROA = net income revenue on sales x 100% ROS = net income equity x 100% ROE = total liabilities total assets x 100% Debt ratio = current assets short-term liabilities Current ratio = What do various indicators mean?