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Key ratios - profitability

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    Gabriel O.
    ML
    Gabriel O.

    Profitability. This is the measure of profit against Sales, assets, capital or other figures.Investors and creditors uses profitability to access company's return on investments to determine if they are credit worthy or not.

    Wendy C.
    AU
    Wendy C.

    Profitability ratios are helpful in representing income versus outgoing

    Samuel F.
    ZA
    Samuel F.

    What causes a variation in profit margin and turnover ratios between industries?

    Samuel F.
    ZA
    Samuel F.

    Profitability ratios compare income statement accounts and categories to show a company's ability to generate profits from its operations. Profitability ratios focus on a company's return on investment in inventory and other assets. These ratios basically show how well companies can achieve profits from their operations. Investors and creditors can use profitability ratios to judge a company's return on investment based on its relative level of resources and assets. In other words, profitability ratios can be used to judge whether companies are making enough operational profit from their assets. In this sense, profitability ratios relate to efficiency ratios because they show how well companies are using their assets to generate profits. Profitability is also important to the concept of solvency and going concern.

    Harrison A.
    AT
    Harrison A.

    Profitability is the the net result of a large number of policies and decisions of the management team of any organisation or company .This ratio reveals some interesting thing about the way the firm is orperating . It gives the final answer about how effective the firm is being managed . Investors generally are most interested in profitability ratios . Profitability Ratios are the usually computed in two ways , one approach is to relate profit to sales . The fiqures can be gross profit, operating profit or net profit . Gross profit margin ratio: it tells us about the gross profit of €1 sales . Net profit margin;this measures the percentage of profit made for every sales . Operatin profit margin ratio measures the operating profit per euro of sales .

    Harrison A.
    AT
    Harrison A.

    Differentiate between Activity and Profitability Ratios ?

    Zachary B.
    US
    Zachary B.

    Where can u find different accounting information?

    Diamond T.
    US
    Diamond T.

    Profitability ratios compare income statement accounts and categories to show a company's ability to generate profits from its operations. Profitability ratios focus on a company's return on investment in inventory and other assets. These ratios basically show how well companies can achieve profits from their operations. Investors and creditors can use profitability ratios to judge a company's return on investment based on its relative level of resources and assets. In other words, profitability ratios can be used to judge whether companies are making enough operational profit from their assets. In this sense, profitability ratios relate to efficiency ratios because they show how well companies are using their assets to generate profits. Profitability is also important to the concept of solvency and going concern.

    Douglas R.
    US
    Douglas R.

    Confusing in some aspects.

    Ardian R.
    flag-default-icon
    Ardian R.

    A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.

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