Hello,

I got stuck on this questions, I cannot understand what means these concepts and how could calculate them ( the formula ) , even I try to do reaserch through internet but there is not too clearly explanation , could you please tell me what do them mean and how to calculate them ? :

1. Economic Profitability
2. Financial Profitability:
3. Investment rotation

The data show on following :

The person in charge of the finances of the company MGT, S.A. wants to know the company's situation concerning the industrial sector to which it belongs. For this, it has the following information regarding the industry:

1. General liquidity ratio is 1.55; the acid test is 1.20, and the ratio between the available and the current liabilities is 0.95.
2. The debt ratio stands at 1.25. The margin on sales is 21%. The investment rotation is 1.45 times.
3. Economic profitability is around 23%, and financial profitability is 29%

The data referred to the company (in thousands of ) are the following:

Assets		Liability and Net Equity
Non-current asset (net)	170	Equity	125
Stocks of finished products	45	Reservations	25
Clients	65	External Resources	105
Banks	70	Loans	65
		Supplier	30
Total Assets	350	Total Net Equity	350

In addition, it is known that:

• Sales are 250,000 and its direct cost of 105,000.
• Amortization of 70,000.
• Long-term debt generates interest at 5%, short-term bank loans at 7%, and the departure of suppliers does not accrue any interest.
• The Corporation Tax is 25%.

.Thanks,