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  2. Financial ratio - Wikipedia

    en.wikipedia.org/wiki/Financial_ratio

    Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt. [2] Activity ratios measure how quickly a firm converts non-cash assets to cash assets. [3] Debt ratios measure the firm's ability to repay long-term debt. [4] Profitability ...

  3. How to Calculate Profit - AOL

    www.aol.com/finance/calculate-profit-050000335.html

    Measure your profit on a quarterly, if not monthly, basis to track your progress. ... Profit margin analysis uses profitability ratios to see how well your business turns sales into profit and ...

  4. Profit margin - Wikipedia

    en.wikipedia.org/wiki/Profit_margin

    Profit margin in an economy reflects the profitability of any business and enables relative comparisons between small and large businesses. It is a standard measure to evaluate the potential and capacity of a business in generating profits. These margins help business determine their pricing strategies for goods and services.

  5. What’s the Profitability Index (PI) and How Is It Calculated?

    www.aol.com/finance/profitability-index-pi...

    PI, by contrast, measures the ratio of the present value of future cash flows to the initial investment cost, helping investors assess the relative profitability of projects.

  6. Financial analysis - Wikipedia

    en.wikipedia.org/wiki/Financial_analysis

    A ratio's values may be distorted as account balances change from the beginning to the end of an accounting period. Use average values for such accounts whenever possible. Financial ratios are no more objective than the accounting methods employed. Changes in accounting policies or choices can yield drastically different ratio values. [6]

  7. Return on equity - Wikipedia

    en.wikipedia.org/wiki/Return_on_equity

    The return on equity (ROE) is a measure of the profitability of a business in relation to its equity; [1] where: . ROE = ⁠ Net Income / Average Shareholders' Equity ⁠ [1] Thus, ROE is equal to a fiscal year's net income (after preferred stock dividends, before common stock dividends), divided by total equity (excluding preferred shares), expressed as a percentage.

  8. Financial statement analysis - Wikipedia

    en.wikipedia.org/wiki/Financial_statement_analysis

    There are four main categories of ratios: liquidity ratios, profitability ratios, activity ratios and leverage ratios. These are typically analyzed over time and across competitors in an industry. Liquidity ratios are used to determine how quickly a company can turn its assets into cash if it experiences financial difficulties or bankruptcy. It ...

  9. Profitability analysis - Wikipedia

    en.wikipedia.org/wiki/Profitability_Analysis

    In order to perform a profitability analysis, all costs of an organisation have to be allocated to output units by using intermediate allocation steps and drivers. This process is called costing. When the costs have been allocated, they can be deducted from the revenues per output unit. The remainder shows the unit margin of a product, client ...