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- Profit Margin
- 60% Profit Margin of Academic Publishing Houses
- 30% Services
- 2% food industry
- BvD
- Return on Equity
- Return on Assets
- (Net Profit + interest payments) / (Equity + Liabilities)
- Financial Rations have NO clear cut definition (except Earnings per Share)
- there might be slight differences, maybe have large implications
- best to calculate the ratios yourself
- Earnings per Share → IAS 33
- most important in USA
- “You can talk about the EPS with every taxi driver”
- most Statements have a Glossary of some sort
- Hyper Market → just a huge super market
- Working Capital
- Financial Ratios
- Limitations of Financial Analysis
- only shows information of the past
- no data on the future → how could there be?
- future can only be predicted
- data can be manipulated
- no precise definition (every company does their own math)
- based on financial statements → Principle of Historical Cost, estimates, tax reasons → all polluting the actual financial situation display
- Goodwill larger than Equity
- whether hope of goodwill materializing into profits comes true is speculative
- too optimistic view → if goodwill is 0, the company is instantly bankrupt
- How Banks evaluate a company
- quantitative data → can only be interpreted