Basic earning power

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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.

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