Basic earning power
Basic earning power (BEP) is the ratio that indicates the ability of the firm's assets to generate operating income; it is calculated by dividing EBIT by total assets.
Definitions
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Basic earning power (BEP). This ratio indicates the ability of the firm's assets to generate operating income; it is calculated by dividing EBIT by total assets.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
