Andrews Research Paper Example | Topics and Well Written Essays - 500 words

Andrews - Research Paper Example It measures a firm's efficiency at generating profits from every dollar of net assets. The RoE of the company is 0.8 and 0.6 for 2006 and 2005 respectively. The numbers shows that the company is not so much good in generation revenues and is not increasing the share holders wealth. High ROE yields no immediate benefit. Since stock prices are most strongly determined by earnings per share (EPS). The benefit comes from the earnings reinvested in the company at a high ROE rate, which in turn gives the company a high growth rate. Inventory turnover ratio shows that how the company is managing its stock the numbers for the company is 31 nad 19 for 2006 and 2005 respectively. By analyzing the company's inv. Turnover ratio we have analyzed that the company is not managing its inventory in 2006 that of 2005.The asset turn over ratio gives an idea about how well the company is using its assets in generating revenues.