Table 5 Definitions for key ratios of economic performance
From: Does the company's economic performance affect access to occupational health services?
Profitability | |
Operating margin % | Company's earnings that is left over after paying for variable costs of production divided by net sales. |
Operating profit % | Earnings before interest and taxes (EBIT) divided by net sales. |
Net result % | (Total revenues -- total expenses) divided by net sales = tells if a company has earned or lost money in an accounting period with its business. |
Total result % | Net result + extraordinary incomes -- extraordinary expenses divided by net sales |
Profit/loss for the accounting period % | |
The profit/loss result after the company has paid the taxes divided by net sales. | |
Solidity | |
Return on Capital Assets % | Tells how profitable the company is relative to its total assets. = Net income/total assets |
Return on investment % | Evaluates the efficiency of an investment = (gain from investment -- cost of investment)/cost of investment. |
Return on equity % | Tells how much profit is made relative to the owners investment in the company = Net income/shareholders equity |
Relative indebtedness % | Company's liabilities divided by its turnover. Less than 40%: Good 40--80%: Satisfactory More than 80%: Poor |
Equity ratio % | The percentage of equities from the balance sheet Over 40%: Good 20-40%: Satisfactory Less than 20%: Poor |
Liquidity | |
Quick ratio | Company's ability to meet its obligations. Over 1: Good 0.5-1: Satisfactory Less than 0.5: Poor |
Current ratio | Company's ability to meet short term debt obligations. Over 2: Good 1-2: Satisfactory less than 1 poor |