profitability ratios are used to: show the speed with which resources can be converted to cash measure of the firm's ability to pay its current liabilities determine how efficiently a company is being managed measure the degree and effect of a firm's use of borrowed funds on its operation determine how efficiently a company's manages its retained earnings

Respuesta :

Using information at a single point in time, profitability ratios are a class of financial measurements that are used to evaluate a company's capacity to generate profits in relation to its revenue, operating costs, balance sheet assets, or shareholders' equity over time.

What profitability ratio should you use?

Since most industries often regard 10% as the average and 20% as high or above average, consider aiming for profit ratios between 10% and 20% while keeping an eye on the industry average.

What does profitability analysis mean?

Enterprise resource planning (ERP) has a functionality called profitability analysis that enables administrators to forecast a proposal's profitability or improve the profitability of an ongoing project.

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