what are profitability ratios?

Answer Posted / amandeep kaur

I measures profitability of the company. it is calculated by relating profits to sales, investment or shares.

TYPES:-
1) ROI(Return on investment):- EAT/TOTAL ASSETS.
2) ROE(Return on equity) :- EAT/OWNERS EQUITY.
3) Gross profit ratio :- Gross profit/sales * 100
4) Net profit ratio :- EAT/sales * 100
5) Operating profit ratio :- EBIT/sales * 100

(EAT- Earnings after tax, EBIT- Earnings before interest and tax.)

Is This Answer Correct ?    5 Yes 0 No



Post New Answer       View All Answers


Please Help Members By Posting Answers For Below Questions

Company XYZ split 5:1 on June 30, 2008. Date Close Price # of Shares Revised Closed Price Revised # of Shares June 15, 2009 $75.00 5,000 $75.00 5000 April 23, 2009 $72.00 7,500 $72.00 7500 March 31, 2009 $67.00 135 $67.00 135 March 31, 2008 $275.00 531 $55 2755 November 30, 2007 $233.00 266 $46.6 1330 October 6, 2006 $1,333.00 10 $266 50

1664


I want to know accounting information in oracle apps projects costing module. i.e Which account is cr and which account db. Please help me.

1664


Explain me what do you think is bank reconciliation statement?

627


What GP resew of balance sheet taking.

1634


bank releted question interviw plz tel me

2028






What is finance lease? What are bonus Shares? entry for it. What is Depreciation? What is the Journal Entry? What is DPS? What is minority Interest? where it is shown?

2169


What will be the journal entry of purchase and sale for ac purchased for 40000 vat 5% sold for 45000 vat5%

1149


what is windows dressing final accounts?,sales a/c belongs to which a/c type?

1630


what are the charecteristics of cost accounting financial accounting managment accounting payroll accounting environmental accounting h r accounting forensic accounting inflation accounting?

1449


How Can We Differ Horizental & Vertical Balace Sheet? Explain.

1415


Is transfer Profit / loss account to capital account important in Tally ERP 9 at the end of the financial year? And what is the benefit of transferring P/L account to Capital account ? Please I want someone to answer my question, this is my second question I posted one question 2 days ago also nobody reply to that question. Thank you.

1746


Tell me what happens to company's “cash account” if it borrows money from the bank by signing a note payable?

585


Hello Sir, My Name is Shoaib, I am Novice in Accounting Field. I want to learn the simple & step by step, procedure to final my company account. Please Help

1448


In which book we can learn in detail of closing stock valuation. And if any site is available kindly help.

1391


Explain a time when you have not met your goal?

622