Performance Evaluation Accounting, Finance, SPSS Coursework (Coursework Sample)

Performance Evaluation
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Performance Evaluation
The purpose of return on assets ratios (ROA) in performance evaluation is to show the percentage of profit an organization can make from its assets. Potential investors use the return on assets ratio to determine a company's efficiency in converting its assets into net income. Companies also to depict their performance and develop new approaches to increase the ability to transform the company's investments into profit. Price to earnings ratio (PE) is used to measure a company's stock prices and determine its value by calculating how much investors pay for one unit of the company's net income.
Companies use average total assets to calculate return on assets ratios. They calculate the average total assets and determine how much net income the investments can generate. Market conditions can affect the company's return on assets ratio when the market experiences sales fluctuations.