What are the indicators of corporate profitability?

There are many indicators that reflect the profitability of a company, and the main ones that are usually used are net sales margin, gross sales margin, net asset margin, and return on net worth.

The profitability index is a measure of a company's ability to earn profits, including operating profit margin, cost and expense margins, surplus cash security multiples, return on total assets, return on net assets and return on capital. In practice, listed companies often use earnings per share, dividends per share, price-earnings ratio, net assets per share and other indicators to evaluate their profitability.

1. There are several indicators of profitability:

Net sales margin: it refers to the ratio of net profit to operating income of an enterprise in a certain period of time. The higher the net sales margin means that the enterprise is competitive and profitable. Formula: net operating margin = net profit / operating income

Gross margin of sales: refers to a certain period of the enterprise's gross profit on sales and the ratio of sales revenue. The higher the gross sales margin, the stronger the profitability of the enterprise. Formula: gross sales margin = (sales revenue - cost of goods sold) / sales revenue

Costs and expenses margin: refers to a certain period of time the amount of profits and costs and expenses amount of the ratio. The higher the cost-expense margin, the better the cost control, the stronger the profitability. Formula: cost and expense margin = total profit / total cost

2. What is the importance of enterprise profitability:

Enterprise profitability analysis is an important part of financial analysis. Profitability refers to the ability of the enterprise to obtain profits, the stronger the profitability of the enterprise, the higher the return to shareholders, the greater the enterprise value. At the same time, the stronger the profitability, the more cash flow, the enterprise's solvency has been strengthened;

Profit is the center of concern for all parties inside and outside the enterprise, is the investor to obtain investment income, the creditor to collect the principal and interest of the source of funds, is the operator's business performance and the centralized performance of the management performance is an important guarantee of the continuous improvement of the workers' collective welfare facilities. Therefore, the analysis of enterprise profitability is very important;

Profitability is the most important performance measure of business operators and find problems, improve the breakthrough in business management. For business managers, the purpose of enterprise profitability analysis is specifically expressed in two aspects: the use of profitability indicators to reflect and measure business performance; through profitability analysis to find problems in business management.