Overall profitability ratio is also called as __________.Productivity of the total assetsReturn on investmentsReturn on capital employedEither (B) or (C) (2024)

FAQs

Overall profitability ratio is also called as __________.Productivity of the total assetsReturn on investmentsReturn on capital employedEither (B) or (C)? ›

It indicates the percentage of return on the total capital employed in the business.

Gross Profit Ratio is a profitability ratio that measures the relationship between the gross profit and net sales revenue. When it is expressed as a percentage, it is also known as the Gross Profit Margin.

Profitability measures the ability of a business to generate more total revenue than total expenses. While there are numerous metrics that can be used to measure the financial health of a business, profitability is used to measure the overall success of a business.

The current ratio, a liquidity metric, measures a company's ability to pay short-term debts. A higher ratio indicates greater liquidity. The net profit margin, a profitability metric, shows net income generated per dollar of sales. A higher margin indicates greater profitability.

The probability of an event is expressed as a ratio that can be used to predict the likelihood of an event occurring. Probability ratios are values ranging from 0 to 1. Probability ratios may be represented as fractions, decimals, or percentages. If an event has a probability equal to 0, then it is impossible.

The profitability index is also called the profit investment ratio (PIR), cost-benefit ratio, or the value investment ratio (VIR).

Gross profit margin, also known as gross margin, is one of the most widely used profitability ratios. Gross profit is the difference between sales revenue and the costs related to the products sold, the aforementioned COGS. Gross margin compares gross profit to revenue.

The amount of money made after considering every avenue of earnings and expenses is the profitability of the business. If a business is not profitable, it will not last. Even organizations that are extremely profitable and have bright futures are subject to failure if they cannot maintain profitable operations.

Common profitability ratios used in analyzing a company's performance include gross profit margin (GPM), operating margin (OM), return on assets (ROA) , return on equity (ROE), return on sales (ROS) and return on investment (ROI).

A good metric for evaluating profitability is net margin, the ratio of net profits to total revenues.

What is the profitability of assets ratio? ›

The return on total assets ratio is obtained by dividing a company's earnings after tax by its total assets. This profitability indicator helps you determine how your company generates its earnings and how you compare to your competitors.

The simplest measure of profitability is net income, which is revenue minus expenses. This shows the amount of income you generate from your business after accounting for all expenses.

Profitability ratios depict how much profits a company is generating, whereas efficiency ratios measure how efficient a company utilizes its resources to generate a profit. Profitability ratios measure a company's ability to generate profits within a specified context.

Formulaically, the structure of a profitability ratio consists of a profit metric divided by revenue. The resulting figure must then be multiplied by 100 to convert the ratio into percentage form.

• Probability is the PROPORTION of times the outcome would occur in many repeated trials of a random phenomenon. • Probability is long term relative frequency.

Profitability ratios are financial metrics used by analysts and investors to measure and evaluate the ability of a company to generate income (profit) relative to revenue, balance sheet assets, operating costs, and shareholders' equity during a specific period of time.

The profit volume ratio (PV ratio) is a financial metric used to measure the relationship between a company's profit and its sales volume. It is calculated by dividing the contribution margin by the sales revenue.

The Gross Margin Ratio, also known as the gross profit margin ratio, is a profitability ratio that compares the gross margin of a company to its revenue.

'Profit Sharing Ratio' is a common term that is prevalent in a partnership type of business. This is simply the ratio at which the partners share their profit in the business.

Net profit ratio, also known as net profit margin, measures a company's financial performance or profitability after taxes. It helps measure the company's profit to the total amount of money invested in the business.