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Profitability Ratios

The profitability of an endeavor depends not only on the absolute profits generated, but also on the assets that must be employed to generate those profits. Profitability ratios can be used to determine a company’s efficiency on both counts. The higher the profitabilty the better.

The major profitability ratios are:

For more information, see all articles on: Financial Statement Analysis, Fundamental Analysis, Investing in Stocks, Ratio Analysis, Security Selection

See also:
  • Ratio Analysis
  • How Value and Growth Stocks Deliver Returns to Investors
  • Return on Assets
  • Liquidity Ratios
  • Growth Investment Styles
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    This entry was posted on Tuesday, January 30th, 2007 at 10:55 am and is filed under Financial Statement Analysis, Fundamental Analysis, Investing in Stocks, Ratio Analysis, Security Selection. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    One Response to “Profitability Ratios”

    1. Return on Assets - Financial Education - Everything You Need To Know About Finance Says:

      [...] on assets (ROA) is a profitability ratio that demonstrates a company’s ability to generate a return for all of its investors, whether [...]

      February 8th, 2007 at 1:26 pm

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