THE RELATIVE RATES OF THE COMPANIES’ ABILITY TO PRODUCE BENEFITS

Nicoleta Bărbuţă-Mişu,”Dunarea de Jos” University of Galati, Romania
Mihaela-Felicia Bodea,”Dunarea de Jos” University of Galati, Romania

ABSTRACT. The company’s ability to generate results from their production and sales can be
determined by a series of rates comparing an indicator reflecting the results and an indicator
reflecting the overall flow of the activity, generally measured by the turnover (sales) or total
assets. Using the comparative method over a period of five years to five companies acting in the
metallurgical sector in this paper has been analyzed the evolution of net operating margin rate,
net profit rate, gross operating margin rate, rate of free cash-flow, return on total assets and
return on equity. Based on these findings it was concluded that the variation of performance of
the companies affects and influences funding arrangements considered by the companies’
managers.

Keywords: metallurgical sector, profit, return on equity, funding sources.

JEL Codes: G30, G32