Profitability ratios can help investors and analysts compare the financial efficiency of competing companies. People are often advised to do “the best they can with what they have,” and the same goes ...

Look for high profitability ratios to identify companies efficiently turning revenue into profits. Analyze margin and return ratios to assess how well a company manages its costs and assets. Compare ...

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

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and ...

In this post I want to talk about profitability, which is a good indicator of a company's quality and a key driver of dividend growth. I’ll cover return on equity, net return on capital and profit ...

One of the most effective ways to compare two businesses is to perform a ratio analysis on each company's financial statements. A ratio analysis looks at various numbers in the financial statements ...

While profit rate is a look at how profitable a company is based on the investment needed to start it, the profit margin ratio looks at how efficiently a business manages its expenses when producing ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Equity investors typically seek companies with strong earnings growth. Even with a good grasp of profitability ratios, investors must avoid some common pitfalls. Investors shouldn’t be seduced by ...