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Making a Judgment about the Profitability of a Company

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An individual interested in making a judgment about the profitability of a company should:
Review the trend of working capital for several years.
Calculate the company's ROI for the most recent year.
Review the trend of the company's ROI for several years.
Compare the company's ROI for the most recent year with the industry average ROI for the most recent year.

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Solution Summary

The solution provides a brief explanation of the steps one could take to gauge a company's profitability

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ROI (Return on Investment) is the most important calculation one needs to make to ensure the long-term viability of their ...

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