Profitability Ratio Calculations Flashcards
Return on equity
Net income / shareholder’s equity
Net income / shareholder’s equity
Return on equity
Return on assets
Net income / total assets
Net income / total assets
Return on assets
Return on capital employed
EBIT / capital employed
EBIT / capital employed
Return on capital employed
Gross margin ratio
Gross profit / revenue
Gross profit / revenue
Gross margin ratio
Operating profit margin
Operating profit / total revenue
Operating profit / total revenue
Operating profit margin
Net profit margin
Net income / total revenue
Net income / total revenue
Net profit margin
What are return ratios?
Represent the company’s ability to generate returns for its shareholders
Represent the company’s ability to generate returns for its shareholders
What are return ratios?
What are margin ratios?
Represent the company’s ability to convert sales into
profits at various degrees of measurement
