Brian Feroldi
I demystify the stock market | Author, Speaker, Creator | 100,000+ investors read my free newsletter (see link)
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its total assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capitalWhat ratios do you track before making an investment? Let me know in the comments section below!-----------Hi 👋 - thanks for reading!➕ Follow me Brian Feroldi for more content like this.✅ Want to keep learning? Grab a free copy of my accounting eBook8 Accounting Terms Explained Simply.Get it here: https://lnkd.in/eK47NEmnIf you found this post useful, please share (repost ♻️) to help make LinkedIn a better platform for all.
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Brian Feroldi
I demystify the stock market | Author, Speaker, Creator | 100,000+ investors read my free newsletter (see link)
6mo
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📌 Grab a free copy of my accounting eBook8 Accounting Terms Explained Simply: https://lnkd.in/eK47NEmn
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Zubair Usman
The Real World Practical Accounting Training
6mo
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Great
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Kurtis Hanni
CFO writing about business finances
6mo
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Big thing: be consistent in what you’re measuring. It allows comparison.
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Ervina Ardiliyani
Bachelor of Accounting Education | Finance Assistant
6mo
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Thanks for sharing
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Michael Dennis
Author of "Credit & Collection Handbook." "Credit and Collection Manager's Concise Desk Reference." "Customer Profit Hacking" "Happy Customers, Faster Cash" "Credit & Collection Forms and Procedures Manual"
6mo
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I was taught EPS = (Net Income – Preferred Dividends) / Weighted Average Number of Common Shares Outstanding
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Gary Jain 🚀
6mo
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Understanding these ratios is key for investors. Personally, I focus on ROE and Free Cash Flow Margin. They paint a clear picture of a company's financial health.Brian Feroldi!
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Yaseen Saeed
Finance Manager | Managing Corporate Finance, Budgeting, Reporting, FP&A and Internal control | CMA
6mo
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Thanks for sharing Brian Feroldi Do you mean by last one free cash flow regardless cash flow from or used in financing activities?
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Duong Nguyen (MBA, ACCA, CMA)
Chief accountant/CFO/ ACCA, US CMA lecturer
6mo
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In my opinion, Cash flow in the company is the most important. It is considered as the blood of the company. I care of the ratio No 7 and 13. However, I don’t completely agree about No7. You want to know how much sale convert into free cash flow but you minus capaital expenditure from the operating cash flow. It doesn’t help to understand how much sale convert into cash, and How the sales policy, the working capital policies affect the cash flow?
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Nafees Ul Hassan ✨Financial Controller Expert📌Virtual Bookkeeper✨
Empowering Small & Medium Businesses, CEOs, Founders, and Agencies to Optimize Portfolios for Success | Strategic Portfolio Streamlining Expert | Financial Reporting & Analysis Expert | QuickBooks & Xero Pro 📊💼✨
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its total assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capitalWhat ratios do you track before making an investment? Let me know in the comments section below!-----------Hi 👋 - thanks for reading!________➕ Follow meNafees Ul Hassan ✨Virtual Bookkeeping and Ecom Expert✨for more content like this.________#entrepreneur#finance#business#bookkeeping#accounting#professionalgrowth#personalgrowthjourney#bookkeepingservices#accountant#bookkeeper#growthmindset#trendingtopic#balancesheet#financialadviser#financialanalysis#financialcheatsheet#cashflow#financialstatements#corporate
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Maingue Miguel
Senior financial controller | senior Accounting | Account Manager | Business Analysts | Financial Consulting
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its total assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capital.
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Brian Stoffel
I demystify the stock market | Investor, Financial Educator, Creator | 100,000+ investors read my free newsletter (see link)
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its total assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capitalWhat ratios do you track before making an investment? Let me know in the comments section below!-----------P.S. Want to go deeper into analyzing financial statements? Join me for a FREE webinar on 12/19/2023: The Investor's Guide To Financial Statements. RSVP here (it's free!): https://lnkd.in/g3q5T3Bn
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Anish Mathai
Asst. VP & CH - MSME, Corporate Finance & Product Handling.Team Handling| Business Development |Working Capital, Credit Analysis |Product Devpt |Strategic Planning | Budgeting |Portfolio Management |Dynamic Leadership
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things to know
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Andreia Santos
Financial Controller Brazil
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its total assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capital
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Ali Akbar
Lead Mechanical Engineer - Engineering Services - TSD at OQ RPI
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Heads and Leaders should aware….
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Dr. Nilima Thakur
Academician| Educator| Researcher|Mentor|Assistant Professor (Finance) at JIMS , Kalkaji
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14 Profit Ratios …… Business & Investing skills
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Manish Suri
Product and Solution Leader at Avalant Company Limited
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its total assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capitalWhat ratios do you track before making an investment? Let me know in the comments section below!-----------Hi 👋 - thanks for reading!Follow Manish Suri for more :) #LinkedIn #Professional #Networking #Career #JobSearch #Business #Leadership #Employment #Opportunity #Workplace #Success #Motivation #PersonalDevelopment #CareerAdvice #JobSeekers #Entrepreneurship #JobOpening #Hiring #Resume #InterviewTips
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Brian Feroldi
I demystify the stock market | Author, Speaker, Creator | 100,000+ investors read my free newsletter (see link)
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14 Profit Ratios every investor should know: 💸Accounting is the language of business.Level up your business & investing skills by memorizing these ratios:1: Gross Margin➡️What: The percentage of revenue that is translated into gross profit.🟰 Formula: Gross Profit / Sales2: EBITDA Margin➡️What: The percentage of sales that turns into profit before interest, taxes, depreciation, and amortization are subtracted.🟰 Formula: EBITDA / Sales3: Operating Margin➡️What: The percentage of sales that turn into operating income.🟰 Formula: Operating Income / Sales4: EBIT Margin➡️What: The percentage of sales that turns into profit before interest & taxes are subtracted.🟰 Formula: Earnings Before Interest & Taxes / Sales5: EBT Margin (Pre-Tax Margin)➡️What: Percentage of sales that turn into operating income.🟰 Formula? Earnings Before Taxes / Sales6: Net Profit Margin➡️What: Percentage of sales that remains as profit after all costs are subtracted.🟰 Formula: Net Income / Sales7: Free Cash Flow Margin➡️What: The percentage of sales translated into free cash flow.🟰 Formula: Free Cash Flow / Sales8: Earnings Per Share (EPS)➡️What: How much money a company makes for each share outstanding.🟰 Formula: Net Income / Shares Outstanding9: Return On Assets (ROA)➡️What: How much profit a company generates from its assets.🟰 Formula: Net Income / Total Assets10: Return On Equity (ROE)➡️What: Measures how profitable a company is in relation to its equity (the money shareholders have invested in the business).🟰 Formula: Net Income / Equity11: Return On Invested Capital (ROIC)➡️What: Shows you how efficiently a company is allocating capital.🟰 Formula: NOPAT / Total Invested Capital12: Return On Capital Employed (ROCE)➡️What: Measures the profitability of a company and the efficiency with which it uses its capital.🟰 Formula: EBIT / Long-Term Debt + Equity13: Free Cash Flow Conversion➡️What: Measures how much earnings are translated into free cash flow🟰 Formula: Free Cash Flow / Net Income14: Owner's Earnings➡️What: Measures how much cash can be taken out of the business and given to owners🟰 Formula: Net Income + (Depreciation & Amortization) +/- Non Cash Charges - Maintenance Capex +/-Changes in working capitalWhat ratios do you track before making an investment? Let me know in the comments section below!-----------P.S. Want to master the basics of accounting (for free)?I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English.Get started here (It's free) →https://lnkd.in/eKbRV7g6If you enjoyed this post, please repost ♻️ to share with your audience.
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