(Cut R&D) or (Cut CAPEX) = F([[beta].sub.0] + [[beta].sub.1] *(Estimated turnover probability) + [[beta].sub.2] *(Operating cash flow) + [[beta].sub.3] *(Tobin's Q) + [[beta].sub.4] *Leverage + [[beta].sub.5] *Dividends + [[beta].sub.6] *Cash + [[beta].sub.7] *Size + [[beta].sub.8] *(Sales growth) + [[beta].sub.9] *PP&E + [[beta].sub.10] *(Total asset turnover
) + [[beta].sub.11] ROA + [[beta].sub.12] * IMR + Year Dummies + Industry Dummies + [epsilon]) (2)
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.
The independent variables net profit margin (NPM), current ratio (CUR), total asset turnover
(TAT), fixed assets to net worth (PPE), return on investment (ROI), long-term debt to equity (LTD), and earnings before tax (EBT), have been operationalized by using the respective ratios for the period 2004 to 2014 from the Mergent Database.
ROE (DuPont) = Profit Margin (Profit/Sales) * Total Asset Turnover
(Sales/Assets) * Equity Multiplier (Assets/Equity)
Days sales in receivables, and Total asset turnover
) across contractionary and expansionary monetary policy periods using the Wilcoxon two-sample test.
The total asset turnover
ratio (revenue/total assets) is also affected by the method applied, falling from 1.46 under proportionate consolidation to 1.35 under the equity method.
ROE = Net Profit / Sales x Sales / Assets x Assets / Equity = Profit Margin x Total Asset Turnover
x Financial Leverage
The extended DuPont equation is a method of calculating a firm's return on equity (ROE) by utilizing the profit margin (PM), total asset turnover
(TATO) and equity multiplier (EM).
We will show benefits obtained from modification of associations in created ontology of ROI on example of analysis of indicator Total asset turnover
. On Figure 1 and Figure 2 visualization of ontology of ROI in TM4L Editor is shown with extended number of associations, and on Figure 3 after modification of associations.
He noticed that the product of two often-computed ratios, net profit margin and total asset turnover
, equals return on assets (ROA).
TAT = total asset turnover
= revenue + average total assets