Page 122 - APM Integrated Workbook STUDENT S18-J19

Chapter 8

 Easily calculated and policies.
understood.  Ignores changes to
 Ignores depreciation/ working capital or
amortisation (a write off amount of non-current
over several years) and asset replacement
tax/interest (externally needed.
generated).

Other profitability measures

 EVA (Chapter 9).

 Dividend cover (PAT ÷ dividends paid in the year).

 Dividend yield (dividend per share ÷ current share price) × 100.

 P/E ratio (price per share ÷ earnings per share).

 Earnings yield (EPS ÷ current share price) × 100.

 Return on equity (net PAT ÷ average shareholders’ equity).

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