Overview of Business Profitability in terms of Ratios
Disclaimer- No Trading or Investment Suggestion. This blog is only made for education purpose. Here is list below, what we are going to learn in next 10-15 minutes. What is profitability and Profitability Ratio? For whom & why it is important? What are Main Ratio's in Profitability Ratio and how to calculate them? Case study. What is profitability and Profitability Ratio? => Profit equals to a company's revenues minus expenses. In accounting, profitability analysis is an analysis of the profitability of an organization's output. So, basically profitability is a business's ability to produce return on investment based on its resources. Profitability ratio is used to evaluate the company's ability to generate income as compared to its expenses, investments, capital and other resources associated with the generation of income during a particular period. 2. For whom & why it is important? => Owner...