What's it: Net profit margin is a profitability ratio to measure how much profit is left (in percent) after the company has covered all its costs, including interest expense and taxes. We calculate it by dividing net profit by revenue.

# Profitability Margin

## EBIT Margin: Calculation and Interpretation

What's it: EBIT margin is a profitability ratio to measure how efficiently a company converts its revenue into profit before paying interest and taxes. We calculate it by dividing EBIT by revenue. A high ratio is better because the

## NOPAT Margin: Formula, Calculation, and Interpretation

What's it: NOPAT margin is a profitability ratio to measure how efficiently a company generates profit from its core business after accounting for expenses paid as taxes. We calculate it by dividing NOPAT by revenue. We use it as an

## EBIAT Margin: Formula, Calculation, and Interpretation

What's it: EBIAT margin is a profitability ratio to measure how efficiently a company generates profit from all its activities before paying interest expense while taking taxes into account. We calculate it by dividing EBIAT by

## Return on Common Equity (ROCE): Calculation and Interpretation

What's it: Return on common equity (ROCE) is a profitability ratio for measuring the return to common stockholders on their invested capital. It is an alternative to return on equity (ROE) by isolating returns to preferred

## Operating ROA: Formula, Calculation, and Interpretation

What's it: Operating ROA is a profitability ratio to measure how well a company is using its assets to generate profits from its core business. We calculate it by dividing operating profit by total assets. Operating ROA provides

## Pretax Profit Margin: Its Calculation and Interpretation

What's it: Pretax profit margin is a profitability ratio to measure how successfully a company converts revenue into profit before part of it is paid out as tax. We calculate it by dividing profit before tax (pretax profit) divided by

## Operating Profit Margin: Formula, Calculation and Interpretation

What's it: Operating profit margin is a profitability ratio to measure the percentage of profit a company generates from its core business. It tells us how much profit the company makes after paying operating expenses but before paying

## Gross Profit Margin: Formula, Calculation, and Interpretation

What's it: Gross profit margin or gross margin is a financial ratio to measure a company's profitability, calculated by dividing gross profit by revenue. We get gross profit by subtracting the cost of goods sold from

## EBITDA Margin: Formula, Calculation, and Interpretation

What's it: EBITDA margin is a profitability ratio to measure how much a company profits from recorded revenue after adjusting for non-cash items but before paying interest and taxes. We calculate it by dividing EBITDA by revenue,