1. TASK: Insert the appropriate word in the text below:
calculated - Indicator - converting - vary - invest
measure - operating - percentage - using - similar
allocating - earnings - earns - add - equity
An _________ of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at _________ its assets to generate earnings. _________ by dividing a company's annual earnings by its total assets, ROA is displayed as a _________. Sometimes this is referred to as "return on investment".
= Net Income/Total Assets
Note: Some investors _________ interest expense back into net income when performing this calculation because they'd like to use _________ returns before cost of borrowing.
ROA tells you what _________ were generated from invested capital (assets). ROA for public companies can _________ substantially and will be highly dependent on the industry. This is why when using ROA as a comparative _________, it is best to compare it against a company's previous ROA numbers or the ROA of a _________ company.
The assets of the company are comprised of both debt and _________. Both of these types of financing are used to fund the operations of the company. The ROA figure gives investors an idea of how effectively the company is converting the money it has to _________ into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million and total assets of $5 million, its ROA is 20%; however, if another company _________ the same amount but has total assets of $10 million, it has an ROA of 10%. Based on this example, the first company is better at _________ its investment into profit. When you really think about it, management's most important job is to make wise choices in _________ its resources. Anybody can make a profit by throwing a ton of money at a problem, but very few managers excel at making large profits with little investment.
2. CHECK YOUR SPEAKING
|
to add |
æd |
прибавлять |
|
to calculate |
ˈkæl.kjʊ.leɪ.tɪd |
расчитывать |
|
Indicator |
ˈɪn.dɪ.keɪ.tər |
показатель |
|
to operate |
ˈɒp.ər.eɪtɪŋ |
операционный |
|
percentage |
pəˈsen.tɪdʒ |
процент; процентное отношение |
|
to use |
juːz |
использовать |
|
to allocate |
ˈæl.ə.keɪtɪŋ |
распределять |
|
to convert |
kənˈvɜːtɪŋ |
ковертировать |
|
earning |
ˈɜː.nɪŋz |
прибыль |
|
to earn |
ɜːn |
зарабатывать |
|
equity |
ˈek.wɪ.ti |
собственный капитал |
|
to invest |
ɪnˈvest |
инвестировать |
|
to measure |
ˈmeʒə(r) |
измерять |
|
similar |
ˈsɪmələ(r) |
подобный |
|
to vary |
ˈveəri |
варьироваться |
3. SEE CORRECT ANSWER
An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on investment".
= Net Income/Total Assets
Note: Some investors add interest expense back into net income when performing this calculation because they'd like to use operating returns before cost of borrowing.
ROA tells you what earnings were generated from invested capital (assets). ROA for public companies can vary substantially and will be highly dependent on the industry. This is why when using ROA as a comparative measure, it is best to compare it against a company's previous ROA numbers or the ROA of a similar company.
The assets of the company are comprised of both debt and equity. Both of these types of financing are used to fund the operations of the company. The ROA figure gives investors an idea of how effectively the company is converting the money it has to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million and total assets of $5 million, its ROA is 20%; however, if another company earns the same amount but has total assets of $10 million, it has an ROA of 10%. Based on this example, the first company is better at converting its investment into profit. When you really think about it, management's most important job is to make wise choices in allocating its resources. Anybody can make a profit by throwing a ton of money at a problem, but very few managers excel at making large profits with little investment.
Цей та багато інших цікавих матеріалів Ви знайдете в підручнику “Practical Financial English”
Докладніше про книгу та її замовлення див. тут >>>
Переглянути нову термінологію і пройти інші тести можна тут >>>
Тренуйте навички фінансової англійської тут >>>