The percentage of sales available to cover such operating costs as general and administrative expenses.
Gross profit margin = Sales Revenue-Cost of Goods Sold/Sales Revenue
The percentage of profit earned on sales. If low when compared with others in the industry, a firm's costs may be too high or the prices it charges may be too low, or both.
Net profit margin = Net Income/Sales Revenue
Measures the return of total investment in the firm.
Return on total assets = Net Income Available to Common Shareholders/Total Assets
Measures the rate of return on the stockholder's investment.
Return on stockholders' equity = Net Income Available to Common Shareholders/Stockholders' equity
Copyright © Marilyn Shaw and Merri Incitti
This page last updated November 1995
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