Page 23 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Objectives

Financial performance evaluation

6.1 Overview

Profit
margins ROCE = (Operating
ROE = (Net profit/Capital
profit/Equity) ×
100% employed) × 100%

Profitability

ratios

P/E = Share price/EPS Ratio analysis

D/E

Investor
Lender
Dividend ratios ratios

cover =

EPS/DPS D/(D+E)

Total annual Dividend yield Interest cover =
return to = DPS/Share Operating profit
investors price (PBIT)/Finance
charges (Interest
payable)

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