profit margin = net income / total revenue
Current ratio
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.
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.
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.
a propretary ratio
Yes depending on the level of profitability
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.
formula for beverage cost ratio
E/P i think,
It’s a ratio among Net Operating Income and the debt service. It's used to determine profitability after paying debt service.
Formula to calculate the ratio
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