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Profitability Ratio

Financial Statements

Net Profit Margin: Formula, Calculation, Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

Net Profit Margin Formula Calculation Interpretation

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.

Tags: Financial Ratio, Net Profit, Profitability Margin, Profitability Ratio

Financial Statements

EBIT Margin: Calculation and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

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

Tags: EBIT, Financial Analysis, Financial Ratio, Profitability Margin, Profitability Ratio

Financial Statements

NOPAT Margin: Formula, Calculation, and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

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

Tags: Financial Analysis, Financial Ratio, NOPAT, Profitability Margin, Profitability Ratio

Financial Statements

Return on Assets (ROA): Calculation and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

What's it: Return on assets (ROA) is a profitability ratio to measure how well a company uses its assets to generate profits. This ratio tells us about the returns the company gets on its assets. We calculate it by dividing net profit

Tags: Assets, Financial Ratio, Profitability Ratio

Financial Statements

EBIAT Margin: Formula, Calculation, and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

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

Tags: EBIAT, Financial Analysis, Financial Ratio, Profitability Margin, Profitability Ratio

Financial Statements

Return on Common Equity (ROCE): Calculation and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

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

Tags: Common Equity, Financial Analysis, Financial Ratio, Profitability Margin, Profitability Ratio, ROE, Shareholder

Financial Statements

Operating ROA: Formula, Calculation, and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

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

Tags: Assets, Common Equity, Financial Analysis, Financial Ratio, Profitability Margin, Profitability Ratio, ROA

Financial Statements

Return on Invested Capital (ROIC): Calculation and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

What's it: Return on invested capital (ROIC) is a profitability ratio to measure how much profit is generated for every dollar invested in the company. We calculate it by dividing net income by the total invested capital, expressed as

Tags: Capital, Capital Structure, Competitive Advantage, Profitability Ratio

Financial Statements

DuPont Analysis: Formula, Decomposition, Interpretation, Pros, Cons

By Ahmad Nasrudin · Updated on April 17, 2022

What's it: DuPont analysis is an approach to breaking down the ratio of return on equity (ROE) into several specific ratios. It helps us know why a company's ROE is superior (inferior) to competitors. If we compare the components from year to

Tags: Dupont Decomposition, Financial Ratio, Profitability Ratio

Financial Statements

Pretax Profit Margin: Its Calculation and Interpretation

By Ahmad Nasrudin · Updated on April 17, 2022

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

Tags: Financial Ratio, Pretax Profit, Profitability Margin, Profitability Ratio

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