Profitability Ratios

Question 1

Gross Profit Margin

Answer 1

Gross Profit
—————– X 100
Revenues

Question 2

Operating Profit Margin

Answer 2

Operating Profit
———————– X 100
Revenues

Question 3

Net profit margin

Answer 3

Net profit
——————- X 100
Revenues

Question 4

Asset Turnover Ratio

Answer 4

Revenue / Capital Employed
-
-
How well you generate revenue from capital employed

Question 5

Equity Multiplier

Answer 5

Total Assets. Total Assets
——————- OR. ——————-
Equity. Net Assets

Question 6

Return on Equity

Answer 6

Net Profit
——————- X 100
Equity

Question 7

Return on Capital Employed

Answer 7

Operating Profit
———————– X 100
Capital Employed

Question 8

Break Even Point

Answer 8

Fixed costs
———————————-
Rev/unit - Var. Cost / unit

Question 9

Operational Gearing Ratio

Answer 9

Revenue - Variable Costs
————————————–
PBT

Question 10

Du-pont Analysis

Answer 10

RETURN ON EQUITY
=
Net Profit Margin
X
Total Asset Turnover
X
Equity Multiplier