Return on Equity

Return on Equity = Net Income/Shareholder's Equity

Net income is for the full fiscal year (before dividends paid to common stock holders
but after dividends to preferred stock.) Shareholder's equity does not include
preferred shares.

Return on Assets,
An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to
how efficient management is at using its assets to generate earnings. Calculated by dividing a
company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this
is referred to as "return on investment".
The formula for return on assets is:

Tobins Q,
A ratio devised by James Tobin of Yale University, Nobel laureate in economics, who
hypothesized that the combined market value of all the companies on the stock market should be
about equal to their replacement costs. The Q ratio is calculated as the market value of a
company divided by the replacement value of the firm's assets:

Net profit Margin,

Net profit margin is the percentage of revenue remaining after all operating expenses, interest,
taxes and preferred stock dividends (but not common stock dividends) have been deducted from
a company's total revenue.
The formula for net profit margin is:

(Total Revenue Total Expenses)/Total Revenue = Net Profit/Total Revenue = Net profit Margin

Earnings yield,
The earnings yield is the ratio of a company's last twelve months (LTM) of earnings per share
(EPS) to its stock price. It is the inverse of the price-to-earnings (P/E) ratio.
The formula for earnings yield is:
Earnings Yield = LTM EPS / Stock Price
Let's assume XYZ Company's last twelve months of earnings total $0.75 per share. If XYZ stock
is currently trading at $10.00, then using the formula above, we can calculate that XYZ
Company's earnings yield is:
$0.75 / $10.00 = 7.5%

Current ratio,
Liquidity ratio that measures a company's ability to pay short-term obligations

The Current Ratio formula is:

Also known as "liquidity ratio", "cash asset ratio" and "cash ratio".