The Profitability, Financing, and Growth of the Firm

Goals, Relationships, and Measurement Methods

Sven-Erik Johansson, Mikael Runsten

• Publisher: Studentlitteratur
• Year: 2025
• Edition: 0
• eBook ISBN:
  9789144197180
• Topic: Business
• Subtopic: Business General
• Index: Business

How profitable does a company have to be to ensure its long-term survival? How is a company's equity ratio deter-mined? What are the relationships between return on capital employed, growth and changes in the equity ratio? These are some of the questions discussed in this book, which has been a highly esteemed textbook at universi-ties and colleges, as well as in leadership training, for over 30 years. The authors present an accounting-based model for an integrated analysis of a company's profitability, financing and growth.In this third edition, the examples have been updated and a number of new sections have been added, but above all the form and language have been revised to make the book more accessible. The book is intended primarily to be used on courses in accounting and finance. Many people who work in busi-ness and finance will also find it offers invaluable help in their professional role. _x000B_There is also a website which contains practical exercises, illustrations and Excel models: studentlitteratur.se/6887."This classic book on financial statement analysis, first published in 1983, is in our mind the best Swedish text book in business administration ever. It is easy to be impressed by how much knowledge the authors have managed to include […]. Complicated relationships are explained in a pedagogical way."_x000B_InvestingByTheBooks, May 26, 2015

Table of contents

• _Hlk115860996
• Preface
• Conceptual Framework
• Profit, rate of return, and growth as conditions for …|the survival of the firm
• Leverage relationship: the link between return and …|the liabilities-to-equity ratio
• The rate of return, the liabilities-to-equity ratio, and risk
• Calculation of the rate of return and taxation
• The DuPont relationship and alternative ways to analyze …|operating performance
• The relation­­ship between growth, rate of return …|and the liabilities-to-equity ratio
• Summary of financial relationships
• Cash flow and growth in financial balance
• Growth – allowing a changed debt-equity ratio
• Management control, return, and growth for a group and its parts
• Returns, growth, and equity valuation
• Pitfalls of using financial key ratios