Learn about gross, operating, and net profit margins, how each is calculated, and how businesses and investors can use them to analyze a company’s profitability.

Businesses often use profitability ratios to gauge their performance against industry benchmarks or competitors. Calculating these ratios involves a straightforward process, typically using figures ...

The inventory turnover ratio shows how efficiently a firm has used its inventory. This is important in a small business, where storing excess inventory can be an unwanted burden and cost. Calculate ...

When you want to get an idea of a company's financial condition, ratio analysis is one of the tools of the trade. In the following article, you'll learn about two useful balance sheet ratios: the debt ...

Your company's operating cycle provides a gauge of how long it has cash tied up in operations, which is why it's also commonly referred to as the cash conversion cycle. The operating cycle is a rough ...

The dividend payout ratio can be a helpful metric for comparing dividend stocks. This ratio represents the amount of net income that a company pays out to shareholders in the form of dividends. The ...

Here are some important metrics you can calculate that can tell you a lot about your business' performance. Calculating financial ratios is an important component of analyzing a business that can be ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee ...