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Question
How do you calculate profitability ratios?
How do you calculate profitability ratios?
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Solution
The formulas for calculating profitability ratios are:
- Gross Profit = Gross Profit / sales * 100.
- Return on Equity = Profit after tax / Net worth.
- Return on Assets = Net Profit / Total Assets.
- Earnings Per share = Net Profit / Total no of shares outstanding.
- Return on Capital Employed = Net Operating Profit ÷ Capital Employed × 100
Also read:
The formulas for calculating profitability ratios are:
- Gross Profit = Gross Profit / sales * 100.
- Return on Equity = Profit after tax / Net worth.
- Return on Assets = Net Profit / Total Assets.
- Earnings Per share = Net Profit / Total no of shares outstanding.
- Return on Capital Employed = Net Operating Profit ÷ Capital Employed × 100
Also read:
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