Profitability Ratio

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Profitability ratios are financial metrics used to evaluate a company’s ability to generate profit relative to its revenue, assets, equity, or other financial metrics. These ratios provide insights into the efficiency of a company’s operations and its financial health. Common examples include the net profit margin, return on assets (ROA), and return on equity (ROE). By analyzing these ratios, stakeholders can assess a company’s performance and potential for growth.

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