TRANSLATE BAGIAN ALK

In Exhibit 4.1, the right branch of the diagram relates to rate of return measures, which assess economic
profits relative to the amount of investment. In the analysis of financial statements, the two most
common measures of rate of return are ROA and ROCE, or sometimes just ROE (return on equity). Our
discussion begins with ROA, followed by ROCE. ROA measures a firm’s success in using assets to
generate earnings independent of the financing of those assets. This means that a properly calculated
ROA will be unaffected by the proportion of debt versus equity financing and the costs of those types of
capital. To ensure that financing does not affect the calculation, ROA is defined as