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Is profitability of a firm an adequate measure of its efficiency?
to what extent does profitability of a firm measure its efficiency
A measure of profitability is the?
current retio
What two ratios measure factors that affect profitability?
what tw ratios measure factors
What are uses of an income statement?
An income statement shows the profitability of an entity. Profitability can be a measure that investors and shareholders rely on to make their decisions.
What are the measures of profitability?
Profitability is an important factor when running a business. Businesses calculate profitability in many ways, but figuring out profits after expenses is their goal. Profitable ratios is a measure of profitability that can be used to assess a business's ability to generate earnings.
What measure of profitability is probably of greatest interest to the investing public?
roe
Internal Rate of Return serves what purpose?
Internal Rate of Return is used in capital budgeting. Its primary purpose is to better measure the profitability of investments and to compare this profitability.
Is Working capital is a measure of a company's profitability?
No, working capital is not a direct measure of a company's profitability. Instead, it represents the difference between current assets and current liabilities, indicating a company's short-term financial health and liquidity. While sufficient working capital can support operations and indirectly contribute to profitability, it does not directly assess a company's overall profitability, which is typically measured by metrics like net income or return on equity.
How could the return on assets indicator provide relevant data on the profitability of a company?
The Return on Assets Indicator or ROA shows the relationship between a company's profits to its actual assets. It is a measure of the company's profitability.
WHAT measure would be most useful in comparing the operating profitability of two firms in different industries?
cash in divided by cash out
Criticism of payback period?
The basic criticisms of the payback period method are that it does not measure the profitability of an investment and it does not consider the time value of money.
Profitability ratios are used to measure?
Profitability ratios are used to measure a company's ability to generate profit relative to its revenue, assets, or equity. These ratios help assess overall financial performance, efficiency in generating earnings, and the effectiveness of management in leveraging resources. Common profitability ratios include the gross profit margin, net profit margin, and return on equity (ROE). By analyzing these ratios, stakeholders can gain insights into a company's operational success and financial health.
