Profitability Ratios

return on assets formula

Return on Assets

Better Returns using Assets – Importance of ROA Return on Assets is yet another important profitability ratio that explains the company’s ability to earn profits by utilizing its Assets. Previously, we saw how to evaluate a company’s performance using Capital based Return ratios like Return on Capital Employed or Return on Invested Capital. In this …

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ebitda margin formula

EBITDA margin

What is EBITDA margin? Earlier, we understood everything about Gross Profit Margin ratio. Now, let us put our focus on yet another important profitability ratio – EBITDA margin (pronounced EE-BIT-DAH) As part of this resource, let us understand the meaning of this margin, learn how to calculate it, know its importance and drawbacks. Also, in …

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Pretax Profit margin formula

Pretax Profit margin

What is the Pretax Profit margin ratio? Pretax Profit margin or Profit before Tax margin is a profitability ratio that helps in understanding the company performance for a given period. Unlike Gross Profit margin ratio, that considers only Direct expenses or Cost of Sales, this ratio is arrived after considering all expenses except Taxes. Pretax Profit Margin Meaning …

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