## Return on Assets ROA

Return on assets or ROA measures the percentage rate of return a business gets on its assets. It is calculated by dividing the earnings before interest and tax by the total assets of the business.

Return on Assets ROA November 6th, 2016

## ROCE – Return on Capital Employed

ROCE or return on capital employed measures the percentage rate of return a business gets on its capital employed. It is calculated by dividing the earnings before interest and tax by the total assets less current liabilities of the business.

ROCE – Return on Capital Employed November 6th, 2016

## Net Profit Ratio

The net profit ratio is the profit after tax of the business expressed as a percentage of the revenue. It is calculated by dividing profit after tax by revenue.
The Net profit ratio is also called Net Margin or Net Profit Margin.

Net Profit Ratio November 6th, 2016

## Return on Sales

The return on sales is the operating profit of the business expressed as a percentage of the revenue. It is a measure of the level of true income a business generates on its sales. It is calculated by dividing operating profit by revenue. Operating profit is the same as profit before interest and tax (PBIT), otherwise called earnings before interest and tax (EBIT).

Return on Sales November 6th, 2016

The overhead ratio is the overheads of the business expressed as a percentage of the revenue (sales). It is calculated by dividing overheads by revenue.

## What are Profitability Ratios?

Profitability ratios are used to measure the ability of a business and its management to generate profit.

What are Profitability Ratios? November 6th, 2016

## Gross Profit Percentage

The gross profit percentage is the gross profit (sometimes called gross margin) of the business expressed as a percentage of the revenue. It is a measure of the level of true income a business generates on its sales. It is calculated by dividing gross profit by revenue.

Gross Profit Percentage November 9th, 2016

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