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what are profitability ratios?
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Answer / amandeep kaur
I measures profitability of the company. it is calculated by relating profits to sales, investment or shares.
TYPES:-
1) ROI(Return on investment):- EAT/TOTAL ASSETS.
2) ROE(Return on equity) :- EAT/OWNERS EQUITY.
3) Gross profit ratio :- Gross profit/sales * 100
4) Net profit ratio :- EAT/sales * 100
5) Operating profit ratio :- EBIT/sales * 100
(EAT- Earnings after tax, EBIT- Earnings before interest and tax.)
| Is This Answer Correct ? | 5 Yes | 0 No |
Answer / sheena
profitablity ratios are mainly two types.
1.profitablity as related to sales
Gross profit ratio,Net profit Ratio,Operating
profit Ratio.
2.Profitability as realted to investments
Return on capital employed, Return on Equity funds.
With the help of this ratio we can judge the managerial
efficiency which may not be reflected in net profit ratio.
| Is This Answer Correct ? | 5 Yes | 1 No |
Answer / abhishek kumar
salary a/c dr.
advance salary to employee a/c dr
bank a/c cr.
after this in july months
salary a/c dr
bank a/c cr.
advance salary to party a/c cr.
in august months
same as above
advance salary means, loan & advance( current assets)
| Is This Answer Correct ? | 4 Yes | 15 No |
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