Accounting
Textbooks
Boundless Accounting
Analyzing Financial Statements
Accounting Textbooks Boundless Accounting Analyzing Financial Statements
Accounting Textbooks Boundless Accounting
Accounting Textbooks
Accounting

Section 7

Profitability Ratios

Book Version 3
By Boundless
Boundless Accounting
Accounting
by Boundless
View the full table of contents
5 concepts
Thumbnail
Basic Earning Power (BEP) Ratio

The Basic Earning Power ratio (BEP) is Earnings Before Interest and Taxes (EBIT) divided by Total Assets.

Thumbnail
Return on Common Equity

Return on equity (ROE) measures how effective a company is at using its equity to generate income and is calculated by dividing net profit by total equity.

Thumbnail
Return on Total Assets

The return on assets ratio (ROA) measures how effectively assets are being used for generating profit.

Thumbnail
Profit Margin

Profit margin measures the amount of profit a company earns from its sales and is calculated by dividing profit (gross or net) by sales.

Thumbnail
Operating Margin

The operating margin is a ratio that determines how much money a company is actually making in profit and equals operating income divided by revenue.

Subjects
  • Accounting
  • Algebra
  • Art History
  • Biology
  • Business
  • Calculus
  • Chemistry
  • Communications
  • Economics
  • Finance
  • Management
  • Marketing
  • Microbiology
  • Physics
  • Physiology
  • Political Science
  • Psychology
  • Sociology
  • Statistics
  • U.S. History
  • World History
  • Writing

Except where noted, content and user contributions on this site are licensed under CC BY-SA 4.0 with attribution required.