Professional Documents
Culture Documents
Profitability
Liquidity
Asset
Solvency
Profitability ratios:-
1. Gross profit ratio =gross profit/turnover*100
Here:
Turnover=sales
Gross profit=net sales-cost of sales
Cost of sales=opening stock +net purchase+ other direct expenses-closing stock
It tell us how much we earn per rs.1 of turnover our business is earning