Some examples of profitability ratios are profit margin, return on assets and return on equity. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios.
For instances, some industries experience seasonality in their operations. The retail industry, for example, typically experiences higher revenues and earnings for the Christmas season. Therefore, it would not be too useful to compare a retailer's fourth-quarter profit margin with its first-quarter profit margin. On the other hand, comparing a retailer's fourth-quarter profit margin with the profit margin from the same period a year before would be far more informative.
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Коэффициенты прибыльности.Коэффициенты, позволяющие определить прибыльность компании. Маржа прибыли позволяет определить прибыльность по отношению к пр... смотреть
Profitability ratios: translation Ratios that focus on the profitability of the firm. Profit margins measure performance with relation to sales. Rate o... смотреть
profitability ratios: translation Ratios that focus on how well a firm is performing. profit margins measure performance with relation to sales. rat... смотреть