Rio Tinto EBITDA vs. Net Income
| CRA1 Stock | EUR 72.43 0.61 0.85% |
For Rio Tinto profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Rio Tinto to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Rio Tinto Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Rio Tinto's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Rio Tinto Group over time as well as its relative position and ranking within its peers.
Rio |
Rio Tinto Group Net Income vs. EBITDA Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Rio Tinto's current stock value. Our valuation model uses many indicators to compare Rio Tinto value to that of its competitors to determine the firm's financial worth. Rio Tinto Group is number one stock in ebitda category among its peers. It also is number one stock in net income category among its peers making up about 0.49 of Net Income per EBITDA. The ratio of EBITDA to Net Income for Rio Tinto Group is roughly 2.06 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Rio Tinto's earnings, one of the primary drivers of an investment's value.Rio Net Income vs. EBITDA
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company operating cash flow based on data from the company income statement and is a very good way to compare companies within industries or across different sectors. However, unlike Operating Cash Flow, EBITDA does not include the effects of changes in working capital.
Rio Tinto |
| = | 25.53 B |
In a nutshell, EBITDA is calculated by adding back each of the excluded items to the post-tax profit, and can be used to compare companies with very different capital structures.
Net income is the profit of a company for the reporting period, which is derived after taking revenues and gains and subtracting all expenses and losses. Net income is one of the most-watched numbers by money managers as well as individual investors.
Rio Tinto |
| = | 12.42 B |
Because income is reported on the Income Statement of a company and is measured in dollars some investors prefer to use Profit Margin, which measures income as a percentage of sales.
Rio Net Income Comparison
Rio Tinto is currently under evaluation in net income category among its peers.
Rio Tinto Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Rio Tinto, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Rio Tinto will eventually generate negative long term returns. The profitability progress is the general direction of Rio Tinto's change in net profit over the period of time. It can combine multiple indicators of Rio Tinto, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company was founded in 1873 and is headquartered in London, the United Kingdom. RIO TINTO is traded on Frankfurt Stock Exchange in Germany.
Rio Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Rio Tinto. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Rio Tinto position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Rio Tinto's important profitability drivers and their relationship over time.
Use Rio Tinto in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Rio Tinto position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rio Tinto will appreciate offsetting losses from the drop in the long position's value.Rio Tinto Pair Trading
Rio Tinto Group Pair Trading Analysis
The ability to find closely correlated positions to Rio Tinto could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Rio Tinto when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Rio Tinto - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Rio Tinto Group to buy it.
The correlation of Rio Tinto is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Rio Tinto moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Rio Tinto Group moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Rio Tinto can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Rio Tinto position
In addition to having Rio Tinto in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Other Information on Investing in Rio Stock
To fully project Rio Tinto's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Rio Tinto Group at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Rio Tinto's income statement, its balance sheet, and the statement of cash flows.