Purchase Solution

ratios for profitability and riskiness

Not what you're looking for?

Ask Custom Question

Where do I begin when attempting to assess a company's profitability and riskiness?

The question specifically asked what ratios should be used to assess 1. profitability 2. riskiness of a company?

What's your advice and please provide an explanation as to why.

Purchase this Solution

Solution Summary

Ratios for profitability and riskiness is examined for a company.

Solution Preview

https://www.zionsbank.com/pdfs/biz_resources_book-7.pdf

https://www.stocktrader.com/2009/06/22/business-risk-analysis-calculate-ratios-debt-equity-earnings-interest/

how to assess a company's profitability and riskiness?

Financial ratios are the mostly used forms of measurement that are capable of deducing the organization's profitability and riskiness. This represents a time-tested method wherein the organization can utilize the following ratios to ascertain their profitability including Gross Profit Margin, Operating Profit Margin, Net Profit Margin, and Other Common Size Ratios.

The following formulas are used to deduce the actual gross profit wherein Gross Profit = Net Sales - the Cost of Goods Sold with the Net sales equalling gross sales less any returns and discounts while the Operating Profit equals Gross Margin - Selling and Administrative Expenses with the Administrative Expenses equalling salaries, payroll ...

Purchase this Solution


Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Motivation

This tests some key elements of major motivation theories.