Business Finance 101

Companies measure their potential for growth by evaluating their Earnings to Assets (E/A) ratio. This ratio gives them a measure of how much of the money they spend on expansion comes from their profits or from borrowing. Growth cannot be sustained with excessive borrowing so the higher this value is, the better.

Also, nearly every corporation in the world touts that their employees are their biggest asset. With this in mind let's examine ways to improve E/A ratios. If earnings are driven by the market and the market is down, what would a company have to do to increase its E/A? You do the math.