Comparing Profitability: Companies: NFX, KMG and Burlington Using ROA, ROE and other ratios to compare profitability of these three companies.

Comparing Profitability: Companies: NFX, KMG and Burlington 1) The rate of return on asset (ROA) calculates a firm's effective autonomous use of an asset to generate earnings without regards to the assets financing. Banks and other creditors use this ratio to evaluate a firm's risk of going bankrupt. The ROA can be broken down to analyze Profit Margin and Asset turnover Ratio, this will help you discover potential strengths and weakness of different entities. When you …showed first 75 words of 907 total…

…showed last 75 words of 907 total…not be included in the calculation of their net income. In the case of Burlington they did not perceive to have any unusual items in their financial statement with regard to the calculation of net income. If you take these different unusual items out of the calculation of net income it would enhance the ability of comparing these different companies profit margins and, therefore, make the profitability across the companies more compatible to each other.