Return on total assets (ROTA) is a ratio that measures a company’s earnings before interest and taxes (EBIT) relative to its total net assets.
Which type of financial ratio is represented by total liabilities over total assets?
Total-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative to assets owned by a company. Using this metric, analysts can compare one company’s leverage with that of other companies in the same industry.
Which type of financial statement shows the company’s assets liability and equity at a moment in time select the best answer?
The balance sheet, sometimes called the statement of financial position, lists the company’s assets, liabilities,and stockholders ‘ equity (including dollar amounts) as of a specific moment in time. That specific moment is the close of business on the date of the balance sheet.
Which is equal to net profit after taxes divided by total assets?
The return on total assets ratio indicates how well a company’s investments generate value, making it an important measure of productivity for a business. It is calculated by dividing the company’s earnings after taxes (EAT) by its total assets, and multiplying the result by 100%.
Which type of financial statement includes information about retained earnings and dividends quizlet?
Stockholders’ equity on the balance sheet includes common stock and retained earnings. The amount of cash paid by a business for dividends would be reported as an operating activity cash flow on the statement of cash flows.
What is total liabilities to total assets?
Total liabilities divided by total assets or the debt/asset ratio shows the proportion of a company’s assets which are financed through debt. If the ratio is less than 0.5, most of the company’s assets are financed through equity. The higher the ratio, the greater risk will be associated with the firm’s operation.
What does liabilities to assets mean?
The liabilities to assets (L/A) ratio is a solvency ratio that examines how much of a company’s assets are made of liabilities. A L/A ratio of 20 percent means that 20 percent of the company are liabilities. Companies with low L/A ratios indicate a company with little to no liabilities.
Which financial statement reports a company’s assets and liabilities?
A balance sheet reports a company’s assets, liabilities and shareholder equity at a specific point in time. A balance sheet provides both investors and creditors with a snapshot as to how effectively a company’s management uses its resources.
Which financial statement shows net worth?
The balance sheet is also known as a net worth statement. The value of a company’s equity equals the difference between the value of total assets and total liabilities.
Which financial statement shows a company’s revenues and expenses?
Also known as the profit and loss statement or the statement of revenue and expense, the income statement primarily focuses on the company’s revenues and expenses during a particular period.
What is net profit divided by total assets?
Return on assets (ROA) is a financial ratio that shows the percentage of profit a company earns in relation to its overall resources. It is commonly defined as net income divided by total assets. Net income is derived from the income statement of the company and is the profit after taxes.
What is net income divided by total assets?
ROA is calculated simply by dividing a firm’s net income by total average assets. It is then expressed as a percentage. Net profit can be found at the bottom of a company’s income statement, and assets are found on its balance sheet.
Is profit after tax an asset?
Net operating profit after taxes (NOPAT) is core operating income, net of taxes. NOPAT excludes income earned from debt-financed assets. NOPAT is useful to company shareholders as it measures the after-tax profit generated by equity-finance assets.
How does net profit affect retained earnings?
Net income increases Retained Earnings, while net losses and dividends decrease Retained Earnings in any given year. Thus, the balance in Retained Earnings represents the corporation’s accumulated net income not distributed to stockholders. When the Retained Earnings account has a debit balance, a deficit exists.
Which financial statement provides the information regarding the source of financing?
The balance sheet reports the economic resources (assets), and the liabilities and stockholders’ equity (financing sources) at their historical costs. It provides information pertaining to a company’s assets and the claims against sources of financing for those assets.
Which of the following is included in net income quizlet?
Net income = Revenues + Expenses. Net income = Revenues – Expenses. Retained earnings = Net Income + Dividends. Net income = Revenues – Expenses.