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profit margin = net income / total revenue

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Ardella Ernser

Lvl 13
2y ago

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Related Questions

Which is an indicator of profitability?

Current ratio


What is a good profitability ratio and how can it be calculated effectively?

A good profitability ratio is a measure of a company's ability to generate profit relative to its revenue or assets. One commonly used profitability ratio is the return on equity (ROE), which calculates the profit generated for each dollar of shareholder equity. To calculate ROE, divide the company's net income by its average shareholder equity. This ratio provides insight into how effectively a company is using its equity to generate profit. A higher ROE indicates better profitability.


What is the net effect of cost to income ratio to profitability?

The cost-to-income ratio measures a company's operating efficiency by comparing operating costs to its income. A lower ratio indicates better efficiency and higher profitability, as it means a larger portion of income is retained as profit. Conversely, a higher ratio suggests higher costs relative to income, potentially reducing profitability. Thus, effectively managing this ratio is crucial for enhancing a firm's financial performance.


What are performance ratios?

Measure of profitability in relation to sales revenue, this ratio determines the net income earned on the sales revenue generated. Formula: Net income x 100 ÷ Sales revenue.


Which of the following ratios would tell an investor about the profitability of the organization?

a propretary ratio


Do companies have some notion of a target payout ratio?

Yes depending on the level of profitability


What strategies can a company implement to achieve a good profitability ratio?

To achieve a good profitability ratio, a company can implement strategies such as reducing costs, increasing sales revenue, improving operational efficiency, optimizing pricing strategies, and managing cash flow effectively. By focusing on these areas, a company can enhance its profitability and financial performance.


What is the formula for beverage cost ratio?

formula for beverage cost ratio


Which financial ratio is the most helpful when determining which company to invest money into is it liquidity profitability leverage or activity ratio.?

E/P i think,


What Is A Debt Coverage Ratio?

It’s a ratio among Net Operating Income and the debt service. It's used to determine profitability after paying debt service.


How do you calculate a ratio from a percent?

Formula to calculate the ratio


How do you state that your hypothesis was correct?

Ho- the profitability ratio of idbi is greater than those of kotak bank H1 - the profitability ratio of kotak bank is greater than those of idbi bank