Chapter 7. Performance drivers

Operating performanceOperating profit model

 

Everything, then, must be assessed in money; for this enables men always to exchange their services, and so makes society possible.

 
 --ARISTOTLE (384–322 BC)

Operating performance

The two prime ratios that drive return on total assets have been identified:

Operating performance
  • margin on sales percentage

  • sales to total assets ratio

and these are laid out again for the Example Co. plc in figure 7.1.

Margin on sales and sales to total assets ratios applied to data from the Example Co. plc

Figure 7.1. Margin on sales and sales to total assets ratios applied to data from the Example Co. plc ...

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