Here are the top 10 profitability ratios you must know with their definitions.
1. Gross Profit Margin
2. EBITDA Margin
3. Operating Profit Margin
4. Net Profit Margin
5. Return on Assets
6. Return on Equity
7. Return on Investment
8. Return on Capital Employed
9. Earnings Per Share
10. Dividend Payout Ratio
A profitability ratio is a financial metric used to evaluate a company’s ability to generate profit relative to its revenue, assets, equity, or other financial metrics. These ratios provide insights into various aspects of a company’s financial performance and efficiency, helping stakeholders understand how well the company is performing in terms of generating profit.
What profitability would you add?