Gross profit ratio- It is a financial ratio that measures the performance and efficiency of a business by dividing its gross profit figure by the total net sales.
Gross Profit Ratio-
Gross Profit
_____________ *100
Net Sales
Operating Cost Ratio- This ratio informs about the share of operating costs (expenses) in the value of revenues from sales, thus it indicates which part of revenues from sales is used for covering the operating expenses.
Operating cost ratio-
Operating cost
________________ *100
Net sales
Operating profit ratio- Is a profitability or performance ratio that reflects the percentage of profit a company produces from its operations, prior to subtracting taxes and interest charges.
Operating profit ratio-
Operating Profit
________________ *100
Net sales
Net Profit Ratio- The net profit percentage is the ratio of after-tax profits to net sales. It reveals the remaining profit after all costs of production, administration, and financing have been deducted from sales, and income taxes recognized.
Net Profit Ratio-
Net Profit
___________ *100
Net sales
Return on Investment- It is a ratio that shows the relationship between net sales and net profit after tax. When expressed as percentage, it is known as net profit margin.
ROI -
Net Profit after tax
___________________ *100
Net sales
Return on Capital Employed- Is a profitability ratio that measures how well a company is able to generate profits from its capital. It is an important ratio that is mostly used by investors while screening for companies to invest.
Return on Capital Employed-
Net Profit after tax_
__________________ *100
Capital Employed
Capital employeed- Total Assets- Total Liabilities
Earnings per share- Is a profitability ratio that measures the extent to which a company earns profit.
Earnings per share-
Net Profit after tax
__________________ *100
No. of equity shares
Price to earnings ratio- It establishes a relationship between the stock (share) price of a company and the earnings per share. It is very helpful for investors as they will be more interested in knowing the profitability of the shares of the company and how much profitable it will be in future.
Price to earnings ratio-
Market price per share
______________________ *100
Earnings per share
