How do you calculate profitability ratios?

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

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