Intro

Key Terms

• EPS = earnings per share, and is income over total shares. 

• ROE = return on equity, which is revenues over expenses. 

• ROA = return on assets, and this is the revenues over the assets. 

• Gross profit i= revenues minus the cost of goods sold, which are the hard costs that go into making the product. 

• Operating profit = gross profit minus expenses. 

• Net income = operating profits minus the cost of taxes and interest. 

• EBIT, or ebit, = earnings before interest and taxes. 

• EBITDA, or ebitda, = the earnings before interest, tax and depreciation amortization. 

• Depreciation amortization is simply the deduction of cost for materials over time.