Profitability ratios - The higher, the better
Gross profit margin
Can increase by raising sales prices or lowering per unit cost
Gross profit margin = gross profit/ revenue
Net profit margin
Can increase by raising sales prices or cutting costs
Others profit ratios:
Net profit margin = net income / revenue
Operating profit margin = operating income / revenue
Pre-tax margin = pre-tax earning / revenue
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment