Click Ratio Name For More Information

• Current Ratio
• EBIT / Interest
• Sales / Receivables
• Sales / Net Fixed Assets
• Cost of Sales / Inventory
• Quick Ratio
• Debt / Worth
• Sales / Working Capital
• Cost of Sales / Payables
• Depreciation / Net Sales
• Officers & Owners Salaries / Net Sales
• Fixed Assets / Tangible Net Worth
• % Profit Before Taxes / Tangible Net Worth
• % Profit Before Taxes / Total Assets
• Net Profit + Depreciation / Current Portion Long Term Debt

Percent Profit Before Taxes / Tangible Net Worth

What it measures

This ratio measures the rate of return on the owners equity.  This is expressed as a percentage.  It can be used as a measurement of the efficiency of management.

How is the ratio calculated

Divide the net operating profit (before taxes) by the owners equity and then multiply by 100.  For example if net income before taxes is 30,000 and owners equity (net worth) is 165,000 then the ratio is

         30,000
        ---------  * 100 = 18.18
        165,000

Target

The target for the percent profit before taxes by net worth is 17.75