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 ?
On the other hand, profitability could be elaborated as the potential or occurrence of attaining financial gain and it is frequently reflected through price/ earnings ratio and other profitability ratios (Abor,2007).
Glass Lewis stated, among other things: "We observe that the Company's performance - as measured by revenue growth, profitability ratios and EBITDA margins - has largely ranked in the bottom quartile of the peer group in recent years.
The report added that profitability ratios like return on assets and return on equity were recorded at 1.4pc and 22.3pc, respectively by end Dec 2018.
As such, Alpha banks posted declining profitability ratios, with an annualized return on assets ratio of 0.91 percent and an annualized return on equity ratio of 10.31 percent , declining respectively by 14 basis points and 95 bps relative to 2017," the report said.
Food and beverage within hotels is under pressure from increasing competition from new and innovative concepts in the city, hence GMs should start reconsidering the conventional operating model for F&B in order not to impact the hotel's profitability ratios, which could take the form of for example outsourcing.
Positive profitability ratios reveal the ability of the company to manage costs and also make the most out of its assets in terms of financial returns.
United also reported higher profitability ratios with increases in both return on assets and return on tangible equity.
Correlation between bank profitability ratios (ROA and ROE) and capital adequacy ratio;
Profitability ratios like return on assets and return on equity (before tax) were recorded at 1.3% and 20.9% respectively by the end of June 2018.
Profitability ratios; return on assets and return on equity-before tax-were recorded at 1.3% and 20.9%, respectively.
Pak-Qatar Family Takaful Limited is the pioneer and the dedicated Takaful Company operating for more than a decade offering financial protection to everyone with a history of robust profitability ratios.
IB's key profitability ratios continue to be good overall, although these have weakened over the last few years, in line with the sector average, reflecting narrowing net interest margins (NIM).