<p>Productivity and Profitability Assessment using Financial Statements (chapter 2) ------CONTENTS OSIRIS DATABASE</p><p>Consolidated data Parent company Subsidiary Segment data</p><p>KEY RATIOS</p><p>Return on Shareholders Funds (%) =</p><p>Profit Margin (%)=</p><p>Return on Total Assets (%)=</p><p>Solvency Ratio (%) =</p><p>1 Productivity and Profitability Assessment using Financial Statements (chapter 2) ------</p><p>Price Earning Ratio =</p><p>EBIT = Operating Profits/Losses EBITDA = EBIT + Depreciation/Amortization</p><p>1. CONTENTS INCOME FUND REPORT</p><p>Total debt to total capital</p><p>Cash flow to total debt</p><p>EBITDA interest coverage</p><p>ROE</p><p>Market capitalization</p><p>OPERATING STATISTICS:</p><p>2 Productivity and Profitability Assessment using Financial Statements (chapter 2) ------</p><p>DEFINITION OF ROE AND ROA FOR THE ANALYSIS</p><p>FIRM A FIRM B TOTAL ASSETS 1000 1000 Non Current Liabilities 600 0 Shareholders Funds 400 1000</p><p>INCOME STATEMENT FIRM A FIRM B Oper. Rev. / Turn. Sales 300 300 (-) Costs of Goods Sold 100 100 (=) Operating P/L 200 200 (-) Financial Expenses (10%) 40 -</p><p>3 Productivity and Profitability Assessment using Financial Statements (chapter 2) ------(=) P/L before Tax 160 200 (-) Taxation (30 %) 48 60 (=) P/L for Period 112 140</p><p>EXERCISE: 1. Estimate ROE and ROA 2. Estimate the leverage effect 3. Comment the movements from year 1 to year 2 4. Explore the changes needed for year 3 to achieve a ROE of 10%</p><p>Year 1 Year 2 TOTAL ASSETS 1000 1500 Non Current Liabilities 400 900 Shareholders Funds 600 600</p><p>INCOME STATEMENT Year 1 Year 2 Oper. Rev. / Turn. Sales 300 450 (-) Costs of Goods Sold 100 300 (=) Operating P/L 200 150 (-) Financial Expenses 40 135 (=) P/L before Tax 160 15 (-) Taxation 48 4.5 (=) P/L for Period 112 10.5</p><p>4</p>