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

To determine the profitability of banks, simply looking at the earnings per share isn't quite enough. It's also important to know how efficiently a bank is using its assets and equity to generate ...

Business accountants measure financial performance and success in myriad ways, including the percentage or ratio known as "operating margin." Operating margin helps accountants and business managers ...

People are often advised to do “the best they can with what they have,” and the same goes for businesses. Profitability ratios are one way for investors to measure just how well a company is doing ...

Financial ratios are relationships determined from a company’s financial information and used for comparison purposes. Examples include such often referred to measures as return on investment (ROI), ...

It's important to emphasize that you need to account for all revenue, including operating revenue and non-operating revenue, such as investment income. Similarly, be sure to account for all expenses, ...

When a business wants to calculate exactly how much revenue it earns from the sale of its products, it looks at the contribution margin ratio. The contribution margin ratio tells a company how much ...

The overhead ratio measures how much of a company's total revenue is spent on indirect costs. This metric is useful for identifying areas where costs can be reduced to improve profitability. Analyzing ...

Financial ratios are calculations that compare two (or more) pieces of financial data that are normally found in a company's financial statements. Ratios can be invaluable to investors making ...