PRE-TAX RETURN ON TOTAL ASSETS
CONDITION
| Year : | 2006 |
| Your ratio : | 25.43 |
| Industry Avg : | 6.7 |
| EBIT : | $98,344 |
| Total Assets : | $389,639 |
| Interest Income : | $1,682 |
GRAPH
PRE-TAX RETURN ON TOTAL ASSETS
This ratio expresses the rate of return on total assets.While it can serve as an indicator of management perfomance, the analyst is cautioned to use it in conjuction with other ratios. A high return, normally associates with effective management, could indicate an under-capitalized firm. Whereas a low return, usually an indicator of inefficient management perfomance, could reflect a highly capitalized, conservatively-operated business.
Return on assets measure how well a comapny's management team is doing its job.A comparison of net income and average total assets,the ROA ratio reveals how much income management has been able to squeeze from each dolar's worth of a comapny's assets. Investor and potential investor use this ratio to evalute a comapny's leadership.Many comapnies, particularly those involved in manufacturing and selling seasonal goods, experiance wide swings in assets during the course of the year. To accommodate for these swings and produce a more accurate ratio,the total assets figure used to calculate the ROA should be an average of a firm's assets at the begning.
The return-on-sales ratio represents the proportion of every sales dollar that results in after-tax profits. It is measure of profitability. The higher the number, the stronger the company. Upwords trends are favorable.