Business analysts evaluate a firm’s financial position and income using these financial performance measures. They are reliably indicate management competence, specifically when compared to previous periods or against a competitor’s ratios. Net income to average assets, also known as return on assets or ROA, net income to equity, also known as return on equity or ROE), net income to total investment, also known as return on investment or ROI, and net income to outstanding shares, also known as earnings per share or EPS are main examples of key ratios.
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