profitability ratios Flashcards
1
Q
gross profit percentage formula
A
gross profit/sales revenue x100
2
Q
describe gross profit percentage
A
this measures the percentage of profit made from buying and selling. The higher the percentage the better
3
Q
profit for the year percentage formula
A
profit for the year/sales revenue x100
4
Q
describe profit for the year percentage
A
this measures the percentage of profit made once expenses are deducted from gross profit. the higher the percentage the better
5
Q
return on equity employed formula
A
profit for the year/equity x100
6
Q
describe return on equity employed
A
this measures the percentage of investment that is returned to investors such as shareholders. the higher the percentage the better
