Businesses often use profitability ratios to gauge their performance against industry benchmarks or competitors. Calculating these ratios involves a straightforward process, typically using figures ...

To determine the profitability of banks, simply looking at the earnings per share isn't quite enough. It's also important to know how efficiently a bank is using its assets and equity to generate ...

Learn about gross, operating, and net profit margins, how each is calculated, and how businesses and investors can use them to analyze a company’s profitability.

Discover how to calculate contribution margin, a key profitability metric, by subtracting variable costs from sales revenue.

Financial ratios are relationships determined from a company’s financial information and used for comparison purposes. Examples include such often referred to measures as return on investment (ROI), ...

One of the most essential aspects of launching and operating a business is selling enough goods or services to pay for the company's costs. If a company can't earn enough to cover its costs, it loses ...

An OverviewA profit margin is a percentage that expresses the amount a company earns per dollar of sales. If a company makes more money per sale, it has a higher profit margin.Gross profit margin and ...

The gross profit ratio is a measure of what percentage of your revenue remains after costs of goods sold are removed. Achieving a high gross profit margin is important because you ultimately need ...

Among the important tools available to investors is ratio analysis. For example, we commonly, perhaps even unconsciously, use the price-earnings ratio as a way of evaluating a stock's price and ...