Profitability Ratios | Understanding Ratio Analysis | Financial Ratios Explained ROE and ROA

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 measure a company’s ability to earn a profit relative to its sales revenue, operating costs, balance sheet assets, and shareholders’ equity.

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