4
Performance and returns
What topics are covered in this chapter?
- Why performance and returns are so important
- The five-year trading record
- Sales
- Profits
- Earnings
- EBITDA
- Key performance ratios: profitability and returns
- Operating profit margins
- Return on capital employed (ROCE)
- Economic value added – exceeding the cost of capital
- Summary
- Checklist
Why performance and returns are so important
By getting to grips with the underlying performance of the business we can see whether the company has a genuinely competitive market position and if management is delivering good results from the assets it has under its stewardship. Generating a good return on capital and creating shareholder value as a result tells us whether management is efficient ...
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