Profitability Ratio

Is a class of financial metrics that are used to assess

a business's ability to generate earnings compared
to its expenses and other relevant costs incurred
during a specific period of time.
The Gross Profit Margin
• Profit between cost of inventory and sales price
• Gross Profit Margin = (Gross Profit/Sales ) x 100
• The goal for net profit margin ratio is 25 % minimum. If a
subcontractors occupy a significant portion of the cost of
revenue the goal can be reduced to 20%.
 
Gross profit Margin =

= 50.00%
Net Profit Margin

• It measures the percentage of each sales dollar remaining

after all cost and expenses including interest and taxes have
been deducted
• Net Profit Margin = (Net Profit/Sales) x 100
 
Net profit Margin =

= 11.09%
Return on Investment
• A performance measure used to evaluate the efficiency of an
investment or to compare the efficiency of a number of different
investments.
• Return on Investment = (Net Profit/Total Assets) x 100
 
Return on Investment=

= 10.97%
Return on Equity
• is a measure of profitability that calculates how many dollars
of profit a company generates with each dollar of
shareholders' equity
• Return on Equity = (Net Profit/Equity) x 100
 
Return on Equity =

= 16.63%