Profitability Ratio
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Nisbah Keberuntungan · EN: Profitability Ratio · ZH: 盈利能力比率
Meaning
Profitability ratios measure a business's ability to earn profit relative to sales or the capital invested. Examples include the gross profit margin, the net profit margin and the return on owner's equity. A higher ratio usually shows that the business is more profitable.
Example
Anggun Boutique records a net profit of RM30,000 from sales of RM150,000, giving a net profit margin of 20%. This means every RM1 of sales produces 20 sen of net profit for the owner.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5