1. Investment Analysis

2. 3 Factors to Consider…
Rate of return: dividing return by investment. The higher the return, the more desirable the investment
Pay-Back Period: # of years required for estimate net income to return the investment. Divide investment by annual return.
Discounted Future Earnings: higher the discount rate, the less value a dollar has in the future.

3. 4 Key Types of Investment Ratios
Asset productivity rations: ratios describe how effectively an asset is deployed or utilized.
Financial Strength ratios: Measured to what extent a company resources are provided by sources other than the owners.

4. 4 Key Types of Investment Ratios
Profitability ratios: Also referred to as management effectiveness because they indicate management’s overall success in generating returns for the enterprise.
Valuation ratios: relate the company’s stock price to its performance.