Difference between revisions of "Profitability ratio"
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According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | ||
:[[Profitability ratios]]. Those ratios—gross profit rate, return on sales, return on total assets, and return on common stockholders' equity—which measure a company's ability to earn a profit. | :[[Profitability ratios]]. Those ratios—gross profit rate, return on sales, return on total assets, and return on common stockholders' equity—which measure a company's ability to earn a profit. | ||
| + | According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | ||
| + | :[[Profitability ratios]]. Ratios that show the combined effects of liquidity, asset management, and debt on operations. | ||
==Related concepts== | ==Related concepts== | ||
Revision as of 21:12, 28 October 2019
Profitability ratio is those ratios—gross profit rate, return on sales, return on total assets, and return on common stockholders' equity—which measure a company's ability to earn a profit.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Profitability ratios. Those ratios—gross profit rate, return on sales, return on total assets, and return on common stockholders' equity—which measure a company's ability to earn a profit.
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Profitability ratios. Ratios that show the combined effects of liquidity, asset management, and debt on operations.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
