Earnings Yield Ratio Analysis

9. The earnings yield ratio is one that is of important interest to the current and potential shareholders of an enterprise. This ratio provides an indication of the advantages that an investor can expect to receive from their investment, or an indication of the earnings earned by the shareholders on the market price of the share. It is the quotient of the earnings per share and the market price per share multiplied by 100.

10. The operating profit margin indicates the percentage of the turnover that realised a profit after provision has been made for all normal operating expenses. The aim of this analysis is to detect consistency or positive/negative trends in a company's earnings. A resultant positive profit margin analysis translates into positive investment quality. It is often the quality, and growth of a company's earnings that drive its stock price. The ratio is calculated by dividing the operating profit by turnover and multiplying the quotient by 100.

11. The price/earnings ratio (P/E) is one of the most trusted investment valuation indicators. This

Lonmin PLC’s percentage return on average assets (ROA) measures how effectively the average assets of a company are utilised to generate income or how profitable a company is relative to its total assets. This ratio illustrates how well management is using the company's total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by comparing net income to average total assets, and is expressed as a percentage. Lonmin PLC’s percentage return on average assets followed a similar pattern as their percentage return on average equity over the 5 year period beginning with a negative return in 2009, gradually increasing until 2012 where there is a significant fall and a recovery in 2013. Lonmin PLC is a capital-intensive business and therefore is asset heavy with large investments in fixed assets resulting in a large