Financial Statements Analysis (2)

If you want to assess the profitability of a business, which ratio is the most appropriate?

• Net profit margin

• Return on assets

• Return on equity

• Return on capital

In order to increase ROIC, a business should…

• Find a business with large total addressable market
• Use more debt financing as source of capital
• Increase the life cycle of its product portfolio
• Identify inefficiencies in the business process and cut cost

The difference between a company's ROIC and ROE is caused by:

• Source of capital
• Business model
• Management competence
• Growth opportunities

From the numbers provided, the company's NOPAT is closest to:

• 56

• 70

• 40

• 64

From the numbers provided, the company's ROIC is closest to:

• 12%

• 9%

• 11%

• 10%

From the numbers provided, the company's ROE is closest to:

• 15%

• 21%

• 17%

• 19%

From the numbers provided, the company's Cash Conversion Cycle (based on 365 days basis) is closest to:

• 90

• 100

• 80

• 70

From the numbers provided, the company's main business is most likely:

• B2B

• B2C

From the numbers provided, the company's D/E ratio is closest to:

• 0.74x

• 0.85x

• 0.43x

• 0.46x

From the numbers provided, the company's interest coverage ratio is closest to:

• 3.5

• 2.0

• 2.5

• 3.0