profitabiltiy ratios

Gross profit margin

gross profit/net sales

Magrin between selling price and cogs

Profit margin

Net icnome/ net sales

Net income per dollar of sales

Asset turnover

Net sales/avg total assets

How efficently assets generate sales

Return on assets

Net income/average total assets

Overall profitability of assets

Return on equity

Net income/ avg share holder’s equity

Proftiability of shareholder’s investment

Earnings per share

(Net income - preferred dividends)/ weighted average of common shares

Net income per common share

Price earning ratio

Market price per share/earnings per share

Relationship between market price and net income per share

Payout ratio

Cash dividends/ net income

Percentage of net income distributed as dividends