Question

3. What is profitability ratio

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Answer 1

Answer:

Profitability ratios assess a company's ability to earn profits from its sales or operations, balance sheet assets, or shareholders' equity. Profitability ratios indicate how efficiently a company generates profit and value for shareholders.

Explanation:

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Answer 2

Answer:

profitability ratios are a class of financial metrics that are used to assess a business's ability to generate earnings relative to its revenue, operating costs, balance sheet assets or shareholders equity. over time, using data from a specific point in time.

profitability ratios can be compared with efficiency ratios, which consider how well a company uses its assets internally to generate income (as opposed to after-cost profits) .