Profitability Metrics

Profitability metrics are financial tools that measure how well a company is generating profit relative to its sales, assets, or equity. Key examples include net profit margin (profit as a percentage of sales), return on assets (profit generated from assets), and return on equity (profit relative to shareholders' investment). These metrics help assess the company's efficiency and financial health, guiding investors and management in decision-making. Essentially, they reveal how effectively a business turns its operations and resources into profit, providing insight into its performance and profitability potential.