Operating Margin- is the ratio of operating profit divided by net sales, usually presented in percent. Net profit measures the profitability of ventures after accounting for all costs.Return on sales (ROS) is net profit as a percentage of sales revenue. . . . ROS is an indicator of profitability and is often used to […]
It is calculated by finding the net profit as a percentage of revenue; where Net Income = Revenue – Cost A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss, or a negative margin.Profit margin is an indicator of
Profit Margin Operating Margin Revenue per Share Gross Profit
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An indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company. The quick ratio is calculated as: Also known as the “acid-test ratio” or the “quick assets ratio”. The quick ratio is more conservative than the current ratio, a more well-known
Enterprise Value/EBITDA measures the value of a company and is often used in conjunction with, or as an alternative to, the P/E ratio (Price/Earnings ratio) to determine the fair market value of a company. Like the P/E ratio, the EV / EBITDA ratio is a measure of how expensive a stock is. It measures the
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