What indicators can reflect the company's profitability?

There are many indicators to reflect a company's profitability, such as gross sales margin, net sales interest rate, cost profit rate and return on total assets. These indicators generally compare the company's gross profit, operating profit or net profit with sales, cost and total assets to calculate the company's profitability under certain income, cost and assets. The bigger the index reflecting profitability, the better the profitability of the company. The numerator denominator of the index calculation formula judges the standard sales gross profit margin/operating income gross profit = operating income-operating cost operating income. The greater the index, the better the profitability of the company's main business or main products. The greater the ratio, the stronger the overall profitability of the company, and the higher the cost profit rate/total cost profit/total cost expense. The bigger the index, the more valuable the company's costs and expenses. Return on total assets/Average net profit of total assets (total assets at the beginning of the period+total assets at the end of the period) /2 The greater this indicator, the higher the company's ability to utilize assets.

1. profitability is: profitability is the company's ability to earn profits. Generally speaking, the company's profitability refers to the normal operating conditions. Abnormal operating conditions will also bring profits or losses to the company, but this is only an individual case under special circumstances and cannot explain the company's ability. Therefore, when analyzing the profitability of a company, securities analysts should exclude the following factors: abnormal items such as securities trading, business items that have been or will be stopped, special items such as major accidents or legal changes, and cumulative effects brought about by changes in accounting standards and financial systems.

2. Calculation formula of profit index: net profit rate of sales = (net profit ÷ sales revenue) ×100%; The greater the ratio, the stronger the profitability of the enterprise; Net interest rate on assets = (net profit/total assets) ×100%; The greater the ratio, the stronger the profitability of the enterprise; Return on net assets = (net profit/shareholders' equity) ×100%; The greater the ratio, the stronger the profitability of the enterprise; Return on total assets = (total profit+interest expense)/average total assets ×100%; The greater the ratio, the stronger the profitability of the enterprise; Operating profit rate = (operating profit/operating income) ×100%; The greater the ratio, the stronger the profitability of the enterprise; Cost profit rate = (total profit/total cost) ×100%; The greater the ratio, the higher the operating efficiency of the enterprise.