Using glo-bus camera company.

1. After reviewing Table 4.1 Key Financial Ratios: How to Calculate Them and What They Mean, list and explain three financial ratios your company will track to determine your current strength.
2. Relative to your companys strengths and weaknesses, what external opportunities exist to grow your companys market share.
3. Describe your companys core competencies, if any and defend your answer.

TABLE 4.1 Key Financial Ratios: How to Calculate Them and What They Mean Ratio How Calculated What It Shows Profitability ratios 1. Gross profit margin Sales revenues-Cost of goods sold Sales revenues Shows the percentage of revenues available to cover operating expenses and yield a profit. 2. Operating profit margin (or retum on sales) Sales revenues-Operating expenses Sales revenues Shows the profitability of current operations without regard to interest charges and income taxes. Earnings before interest and taxes is known as EBIT in financial and business accounting. Operating income Sales revenues Profits after taxes Sales revenues Shows after-tax profits per dollar of sales. 3. Net profit margin (or net return on sales) 4. Total return on assets Profits after taxes + Interest Total assets A measure of the return on total investment in the enterprise. Interest is added to after-tax profits to form the numerator, since total assets are financed by creditors as well as by stockholders. A measure of the return earned by stockholders on the firm's total assets. 5. Net return on Profits after taxes Total assets 6. Return on Profits after taxes Total stockholders' equity The return stockholders are earning on their capital investment in the enterprise. A return in the 12% to 15% range is average. Profits after taxes Long-term debt + Total stockholders' equity A measure of the return that shareholders are earning on the monetary capital invested in the enterprise. A higher return reflects greater bottom-line effectiveness in the use of long-term capital. total assets (ROA) stockholders equity (ROE) 7. Return on invested capital (ROIC)- sometimes referred to as return on capital employed (ROCE)