ROA (Return on Assets): measures a company's ability to earn money from its investments.
Profitability on sales ratio (ROS): measures the company's profit in relation to sales.
Not all indicators have a defined optimal level and their performance must be compared over time and with that of competitors and industry averages.
Profitability analysis evaluates the total oil and gas company canada whatsapp number effectiveness of a company's use of resources and its ability to generate profits.
Values of profitability indicators should be interpreted in the context of changes over time and in comparison with the results of competitors and industry averages.
High profitability ratios do not guarantee a company's success, and low values do not necessarily mean failure.
The profitability analysis should be part of a broader financial analysis that also takes into account other aspects such as liquidity, debt or the efficiency of the company's operations.
More details below.
The main goal of any entrepreneur is to make his company profitable. In this case, the most important thing is to find the right tool that allows the company to examine its profitability. One of the basic methods to meet this need is profitability analysis, which can be performed using ratios: ROS, ROE and ROA.