Question

If you were reviewing a Financial company such as JPMorgan Chase, which of the following metrics is most relevant?

A) Net Interest Margin.
B) Advertising Revenue.
C) Same Store Sales (SSS).
D) Days Sales Outstanding.

Answer 1

Answer: A) Net Interest Margin.

Step-by-step explanation:

JPMorgan Chase as a financial company would not deal with actual inventory so the Days sales outstanding is not a relevant measure. Neither is the SSS as the company is not a retail chain.

The relevant metric would be the Net Interest Margin which is used to measure the difference between the interest income that a bank or similar financial institution makes vs the interest payments that the company will pay out to its lenders.