Understanding Return on Equity
Ratios

Understanding Return on Equity

In the previous blogs, we understood the meaning and application of the accounting ratios of Return on Investments (ROI) and Return on Assets (RoA). While ROI gives an insight into overall profitability, ROA focuses on the returns generated through the efficient use of the assets a company possesses.

Continue Reading about 2 months ago
Importance of Return on Assets in Investment Decision
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Importance of Return on Assets in Investment Decision

In the last blog, we understood the need to analyse how a company uses its investments and assets in order to generate profits and provide returns to its investors, through the calculation of Return on Investment. However, as mentioned earlier, ROI is a broader measure and focuses on the returns generated on different types of investments. In order to make a clear and well-informed decision, one must focus on the more detailed and concentrated aspects and understand a company's profitability. The next step towards this will be to understand the return on a company's assets.

Continue Reading about 2 months ago
Analyzing Investment Decisions through Return on Investments
Ratios

Analyzing Investment Decisions through Return on Investments

Before making a decision on investing money in a company, a potential investor must analyze the company's ability to provide returns to its shareholders. Investors, business managers, stock advisors analyze this ability by calculating various ratios and percentages based on the company's financial statements. This analysis enables an investor to analyze a company's financial status and health. By converting the original financial numbers to ratios, it becomes easier to analyze the risks and trends in the market and the potential risks involved with the company.

Continue Reading about 2 months ago