Besides profit, other financial targets include return on equity, cash flow and return on invested capital.

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An increasing amount of analysis based on cash flow is now carried out among institutional equity investors to calculate the real cash return on assets.

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Staples comes out on top if the measure is return on equity, free cash flow .

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For long picks, the Ward Ferry team puts a lot of emphasis on such classic numbers as return on equity, free cash flow, dividend yields and price-to-book ratios.

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Though strong balance sheets are preferable, big cash balances and low money market rates can be a drag on return on equity.

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Cash bonuses are a function of revenue increases, return on assets or return on equity.

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Because the dividends on Laffer Shares would vary depending upon GDP growth rates, the markets would discount the expected cash flows at an equity rate of return, which is considerably higher than the interest rate on government bonds.

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