7 types of Profitability Ratios every investor should know!💸

A Detailed thread🧵⤵️

#investing #finance

A Profitability Ratio is a type of ratio which helps investors to evaluate a company’s ability for generating income profit in relation to its revenue, operating costs, balance sheet assets & equity shareholders during a particular period of time.
Higher Profitability Ratios generally show the ability of the company to generate profits & cashflows.

There are 7 ratios which we can use while analysing any company:⤵️
1⃣. Return on Equity

It measures a company's annual return or net income divided by the value of its shareholders' total Equity.

In simpler words, it measures the profit made on every 1 rupee of shareholders' Equity.
2⃣. Dividend per share

This profitability ratio shows the amount of dividend that is distributed to its shareholders by the company. The high ratio shows that the company has surplus cash.
3⃣. Price Earning Ratio

P/E Ratio determines the relation between the current stock price & the earnings of the company per share.

Lower the P/E ratio, lesser the price has to be paid for a particular share & vice versa.
4⃣. Return on Capital Employed

ROCE shows how much operating profit a company makes compared to capital provided by various sources

High ratio shows that a larger chunk of profits can be invested back into company for benefit of shareholders which is sign of growth in company.
5⃣. Return on Asset

ROA shows how well the company is utilizing its assets to generate profits. Measuring ROA is more fruitful for companies which are highly dependent on assets for generating revenue like construction, steel industry etc.
Higher ROA shows higher efficiency of the company in generating profits through its assets employed.
6⃣. Net Profit Margin

This ratio indicates how profitable a company is after its expenses including interest & taxes. This ratio can be derived by dividing the company’s net income by its total revenues.
7⃣. Operating Profit Margin

Operating profit margin tells how well the company’s operations contribute to its profitability.

A higher margin shows the company is earning enough money from business operations to pay for all the costs involved in maintaining the business.
Hit retweet🔁 to reach maximum investors & learners.

Read more about such Financial Ratios
https://t.co/rMd4N1ayIr

More from All

Margatha Natarajar murthi - Uthirakosamangai temple near Ramanathapuram,TN
#ArudraDarisanam
Unique Natarajar made of emerlad is abt 6 feet tall.
It is always covered with sandal paste.Only on Thriuvadhirai Star in month Margazhi-Nataraja can be worshipped without sandal paste.


After removing the sandal paste,day long rituals & various abhishekam will be
https://t.co/e1Ye8DrNWb day Maragatha Nataraja sannandhi will be closed after anointing the murthi with fresh sandal paste.Maragatha Natarajar is covered with sandal paste throughout the year


as Emerald has scientific property of its molecules getting disturbed when exposed to light/water/sound.This is an ancient Shiva temple considered to be 3000 years old -believed to be where Bhagwan Shiva gave Veda gyaana to Parvati Devi.This temple has some stunning sculptures.

You May Also Like

This is a pretty valiant attempt to defend the "Feminist Glaciology" article, which says conventional wisdom is wrong, and this is a solid piece of scholarship. I'll beg to differ, because I think Jeffery, here, is confusing scholarship with "saying things that seem right".


The article is, at heart, deeply weird, even essentialist. Here, for example, is the claim that proposing climate engineering is a "man" thing. Also a "man" thing: attempting to get distance from a topic, approaching it in a disinterested fashion.


Also a "man" thing—physical courage. (I guess, not quite: physical courage "co-constitutes" masculinist glaciology along with nationalism and colonialism.)


There's criticism of a New York Times article that talks about glaciology adventures, which makes a similar point.


At the heart of this chunk is the claim that glaciology excludes women because of a narrative of scientific objectivity and physical adventure. This is a strong claim! It's not enough to say, hey, sure, sounds good. Is it true?
The entire discussion around Facebook’s disclosures of what happened in 2016 is very frustrating. No exec stopped any investigations, but there were a lot of heated discussions about what to publish and when.


In the spring and summer of 2016, as reported by the Times, activity we traced to GRU was reported to the FBI. This was the standard model of interaction companies used for nation-state attacks against likely US targeted.

In the Spring of 2017, after a deep dive into the Fake News phenomena, the security team wanted to publish an update that covered what we had learned. At this point, we didn’t have any advertising content or the big IRA cluster, but we did know about the GRU model.

This report when through dozens of edits as different equities were represented. I did not have any meetings with Sheryl on the paper, but I can’t speak to whether she was in the loop with my higher-ups.

In the end, the difficult question of attribution was settled by us pointing to the DNI report instead of saying Russia or GRU directly. In my pre-briefs with members of Congress, I made it clear that we believed this action was GRU.