The ratio of PP&E to total assets and total asset turnover
are also included in our model to reflect the proportion of tangible assets and the efficiency of corporate investment to assets.
The first step is aimed at the differences in RoA between the Czech and German ventures and is based on deeper analyses of the asset turnover
(AT) and the profit margin (PM).
Which means that the more considerable factors for the Return on Equity (ROE) are Profit Margins (PM) and Total Asset Turnover
(TAT) by improving which the Cement Companies of Pakistan can attain more profits and the Equity Multiplier (EM) is a factor which not cause any effect on the return of the companies, so it is required for the cement companies to consider and work on their total assets as by increasing total assets their financial leverage can be good and by improving their profit margins their returns can be more on the basis of their sales.
So, for a dashboard to monitor our finances, we just need to track our asset turnover
, net income margin and equity multiplier, all of which are brought to us courtesy of A.I.D.-assets, income and debt.
(H7) A firm's fixed asset turnover
ratio is positively correlated with its performance measured by ROA.
The results of the regression analysis (Table 4) show that net profit margin (NPM), the current ratio (CUR), the total asset turnover
(TAT), the fixed assets to net worth (PPE), the long-term debt to equity (LTD), and the earnings before tax (EBT) resulted in the expected signs implying that that the higher the net profit margin, the higher the total asset turnover
, the higher the fixed assets to net worth, the higher the long-term debt to equity, and the higher the earnings before tax, the higher the earning power.
The main predictor variables are Natural log of Total Assets, Financial Leverage, Total Margin, Asset Turnover
, Current Ratio, Working Capital To Total Assets, Days Cash On Hand, Days of Patient Receivables Outstanding, Fixed Asset Age, and Salary to Revenue.
The special distribution is the result of net capital gains on asset turnover
, which includes loan sales and early payoffs.
In this study we will use: Net Profit Margin (NPM), Asset Turnover
(Asset T/O), Financial Leverage (FL), Return on Equity (ROE), Capital Ratio (CR), Dividend Payout Ratio (DPR) and Return on Assets (ROA).
ROA can be broken down into profit margin (net operating profit / sales) and asset turnover
ratio (sales / total assets), allowing additional information to be obtained regarding what determines the profitability of the companies.
Kaiser-Meyer-Olkin statistics of anti-image matrix for individual key indicators has not sufficiently high value in these indicators: Operational costs (KMO = 0.468), Investments (KMO = 0.337), Economic result (KMO = 0.394), Economic value added (KMO = 0.344), Added value (KMO = 0.450), Asset turnover
(KMO = 0.384), Liability turnover (KMO = 0.461), Debt (KMO = 0.424), Supplier reliability (KMO = 0.471) and Research and development expenses (KMO = 0.400).