Profitability Ratios

 

In the above example, the company has a very good gross profit ratio and it is increasing each year which shows that either company is able to increase its sale prices without losing sales volume and/or it is able to reduce its manufacturing costs resulting in increased margin per unit.

On the other hand, the company also has a healthy net profit ratio and is improving further. The increase is mainly due to the increase in other income in the years 2014 and 2015 which has positively affected the net profit margin. http://accountingclarified.com/profitability-ratios/

Profitability Ratios

 

One thought on “Profitability Ratios”

  1. Yiimp Pool says:

    good article very hopeful

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