Avg. Vs End of Year / Beginning of Year

CFA Level II
#1

How do we know whether we need to use average between last year and this year or Beg or End of the year for calculating ratios I know for Pretax return on Capital = EBIT / (AVG Assets). Thanks. Could not find in search

#2

I’ll use the average first and see if it comes up as one of the choices. If it doesn’t, I’ll use the beginning of period. If both show up as choices, then I’ll pick the average over the beginning.

#3

The consensus on AF was that if you are using mixed ratios (income and balance sheet) then use average, if it is purely balance sheet then use beginning. That is what I am going with.

#4

Thanks. Really helpful