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Return on assets can be computed as Net income divided by average equity Net income divided by sales The profit margin ratio times the asset
Return on assets can be computed as
Net income divided by average equity | ||
Net income divided by sales | ||
The profit margin ratio times the asset turnover ratio | ||
The profit margin ratio times the return on equity ratio |
When changing the basic EPS to the fully diluted EPS for convertible preferred stock
subtract preferred stock dividends in the numerator | ||
do not subtract preferred stock dividends in the numerator | ||
the number of shares of preferred stock outstanding are added to the denominator | ||
the numerator remains the same as for the basic EPS |
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