Business Decision Making
Profitability ratios are financial metrics used to evaluate a company's ability to generate income relative to its revenue, assets, equity, or other financial metrics. These ratios provide insight into how effectively a company is operating and how well it is using its resources to produce profit. Key profitability ratios include net profit margin, return on assets (ROA), and return on equity (ROE), which together help stakeholders assess overall financial health and operational efficiency.
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