Ratios Ratios that focus on the profitability of the firm. Profit margins, a type of profitability ratio, measure performance with relation to sales.
A calculation of the profit of a product by the number of product turns and gross profit.
The gross profit (i.e., gross margin) calculated as: Job Billing - Job Costs. Profitability reports summarize job profitability from three perspectives: job, task, client, and type. Each report shows total cost, billings, and gross profit margin. The "job" report lists jobs numerically. The "task" report lists tasks alphabetically--;for all jobs to date. The "client" report summarizes all job tasks by client for easy comparison from client to client. "Type" shows profitability by job type.
A firm's income relative to expenditure. Profit before tax can be defined as "operating profit minus losses on fixed asset sales plus net interest income". This ratio therefore builds upon "net margin" by also considering the impact of non-trading items on a business's profitability. A declining figure in any of these three ratios suggests that potentially there is a problem. However, the reason for the decline must be ascertained through detailed analysis of all relevant aspects of the business before any conclusions can be drawn. Profitability = Profit before tax Turnover
The optimization of resource deployment and utilization for business success.