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15+ Basic Earning Power Ratio PNG. It does not account for any internal or external the basic earning power (bep) formula, which is also referred to as the basic earning power ratio, is as follows Another profitability ratio is the basic earning power ratio (bep).
Formula Sheet - FormulaSheet FINA2201(Note: 1.Current Ratio= 3.Debt Ratio = Current Assets ... from www.coursehero.com Pmi's biennial report, earning power: Basic earning power ratio = operating return on assets =. It is calculated by dividing earnings before interest and taxes by the book value of all assets.
The higher the bep ratio, the more effective a company is at generating income from its assets.
It is just a ratio of the earnings of the company and its assets and does not include the capital invested into the company or the tax and interest. This ratio does not take into account tax conditions and various levels of financial leverage what allows to compare companies which otherwise would not. It is just a ratio of the earnings of the company and its assets and does not include the capital invested into the company or the tax and interest liabilities. Shows the earning power of the firm's assets before taxes and debt and is useful for comparing firms with different debt ratios and tax rates.
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