Efficiency of the shareholders' investment in the firm. Use the market value of owners' equity when book value understates assets. Not fully cash - includes accrued sales, income, expenses, assets, and liabilities. 100 Return on the long-term financing of the firm. Efficiency of the funded capital investment in the firm before interest, taxes or dividends.
Debt includes capital leases.
EBIT includes accrued sales, income, expenses. Book value of liabilities and equity may be less than their market value. Book value of equity includes reserves, adjustments and accrued income. The amount of earnings available to make interest payments after all operating and non-operating income and expenses except interest and income taxes. A standard ratio.