Profitability ratio
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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 ratio. 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.
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.
