Remember, all costs need to be included in your selling price. The customer pays for everything. In exchange, you give the customer your services. What a deal!In addition to growth, look at how efficiently the company makes money. Return on assets shows how well it has translated a dollar of its asset base into a dollar of profits. A company with a return on assets of 20%, for example, has produced .20 of earnings from each dollar of assets. Similarly, return on equity measures how well the firm has turned a dollar of shareholders equity into earnings.Corporations operate in much the same manner. First, like a paycheck, they generate cash from operating the business. This is called Operating Cash flow (OCF). From this, they subtract their Capital Expenditures. Capital expenditures are expenses for capital equipment and other physical property, like real estate. What’s left over is their free cash flow.