roic

问题如下：

Nigel French, an analyst at Taurus Investment Management, is analyzing Archway Technologies, a manufacturer of luxury electronic auto equipment with two main competitors which are located in different countries with significantly different tax structures.

Which profitability metric should French use to assess Archway’s five-year historic performance relative to its competitors?

选项：

A.Current ratio B.Operating margin C.Return on invested capital

解释：

B is correct. Operating (EBIT) margin is a pre-tax profitability measure that can be useful in the peer comparison of companies in countries with different tax structures. Archway’s two main competitors are located in different countries with significantly different tax structures; therefore, a pre-tax measure is better than an after-tax measure, such as ROIC. The current ratio is a liquidity measure, not a profitability measure.