Profitability ratios

Profitability ratios

Ratios that focus on how well a firm is performing. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment.

Profitability Ratio

Any ratio that measures a company's ability to generate cash flow relative to some metric, often the amount invested in the company. Profitability ratios are useful in fundamental analysis which investigates the financial health of companies. An example of a profitability ratio is the return on investment which is the amount of revenue an investment generates as a percentage of the amount of capital invested over a given period of time. Other examples include return on sales, return on equity, and return on common stock equity.
References in periodicals archive ?
Nursing home administrators could use the different expense and profitability ratios identified in this study as predictors of staffing levels and staff turnover.
The bank has continually improved its financial performance as indicated by the key performance indicators of investment banking revenues, asset base, profitability ratios and capital adequacy," IIB chairman Saeed Al Fahim said.
Published by the British Printing Industries Federation and sponsored by Canon, it analyzed 17 different productivity and profitability ratios before concluding that operating profit as a percentage of sales ratio for label converters was 6.
He added: 'Our profitability ratios continue to be among the highest in the Co-operative movement.
Volume one contains revenue and expense activities as a percentage of revenue, net profitability ratios, and organizational asset and liability ratios.
All the profitability ratios for meat processors experienced growth over the period under review.
Profitability ratios - show the combined effects of liquidity, asset management and debt management on operating results.
While the cash return ratios shown in exhibit 4 are the counterpart of similar accrual-based profitability ratios, they should be used with caution.
The Bank's solid capital adequacy ratio (CAR), good liquidity and high profitability ratios are major supporting factors.
The profitability ratios, activity ratios, liquidity ratios and solvency ratios for each of the above markets have been analysed and ratios such as gross margin, net income margin, return on assets, asset turnover, current ratio, cash ratio and cashflows to debt ratios have been analysed and their trends in each of the market have been presented.
It added that these results imply the highest profitability ratios among Lebanese listed banks with a return on average equity of 17.