Profitability Ratios

Profit is as essential for a business as blood for life of a human being. A business running in continuous losses finds it dubious to survive in the long-run.

The absence of profits also makes it difficult to attract more funds from the owners and the potential lenders. In addition, profit works as a benchmark to analyze the strength of the policies and performance of the business.

Types of Profitability Ratios:

The following measures may be used to evaluate profitability performance.