What are the key financial metrics important for evaluating Genesee and Wyoming's performance?

The selection of revenue, operating ratio, and return on investment as key financial metrics for evaluating Genesee and Wyoming's performance is well-grounded in financial analysis principles that are crucial in the railroad industry.

Revenue is a fundamental metric that measures the total income generated from operations. For a railroad company, this reflects its capacity to transport goods and services, thus directly indicating business volume and market demand.

The operating ratio is another vital metric, calculated as operating expenses divided by revenue. It provides insight into operational efficiency. A lower operating ratio signifies better efficiency and profitability, which is particularly important in the capital-intensive railroad sector where managing costs effectively is essential for financial success.

Return on investment (ROI) assesses how effectively the company is using its capital to generate profits. It is a key performance indicator that measures the effectiveness of investing in infrastructure, equipment, and other necessary resources. In the context of railroads, where significant investment is required, maintaining a strong ROI is crucial for long-term sustainability and growth.

By focusing on these metrics, stakeholders can gain critical insights into the financial health and operational efficiency of Genesee and Wyoming, enabling better strategic decision-making.