□ Fundamental Ratios
■ Profitability Ratios:
●ROE: It measures the ability of a firm to generate profits from its Shareholder’s investments in the company.
Net Income
ROE= ---------------------- ×100
Shareholder's Equity
Shareholders’ Equity = Share Capital + Retained Earnings – Treasury Stock
●ROCE: It measures how efficiently a company is using its capital employed [Debt & Equity].
EBIT
ROCE: --------------------------- ×100
Capital Employed
Capital Employed = Total assets - Current Liabilities.
●EPS: It is the profit allocated to each outstanding share of common stock.
Net income of the company
1. EPS ------------------------------------------‐-------
Averages Outstanding shares
Net income after tax - Total dividends
2. Weighted EPS ---------------------------------------------
Total number of outstanding shares
■● EBITDA
- D&A(Depreciation, and Amortisation)
----------------
EBIT
- I (Interest)
----------------
EBT
-T (Tax)
-----------------
PAT/NET PROFIT