Part 1 – Section E.5. Return on invested capital

CMA1.E5.a. identify and define the components of return on invested capital (ROI)

CMA1.E5.b. identify uses for ROI

CMA1.E5.c. demonstrate an understanding of the factors that contribute to inconsistent definitions of “invested capital” and “return” when using ROI to measure performance

CMA1.E5.d. identify and calculate adjustments that should be made to capital and income

CMA1.E5.e. calculate and interpret the return on total assets ratio and return on common equity ratio

CMA1.E5.f. analyze return on assets and return on equity using the DuPont model

CMA1.E5.g. calculate and interpret profit margin on sales and total asset turnover and demonstrate an understanding of the relationship between these two ratios

CMA1.E5.h. infer the effect on return on total assets of a change in one or more elements of the financial statements

CMA1.E5.i. disaggregate return on common equity into profit margin on sales, total asset turnover, and equity multiplier (leverage) and be able to calculate these ratios given financial statement data

CMA1.E5.j. calculate and interpret sustainable equity growth, dividend yield and the dividend payout ratio

CMA1.E5.k. calculate and interpret return on common equity

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