What Profitability ratios used to measure?

Answer 1

Profitability ratios are financial metrics used to assess a company's ability to generate profit relative to its revenue, assets, or equity. Key ratios include the gross profit margin, operating profit margin, and net profit margin, which indicate how efficiently a company converts sales into profits at various stages. Additionally, return on assets (ROA) and return on equity (ROE) measure how effectively a company utilizes its assets and equity to produce profit. Overall, these ratios help investors and analysts evaluate a company's financial health and operational efficiency.