What is the purpose of profitability analysis?

Profitability is the company's ability to earn profits. Generally speaking, the company's profitability refers to the normal operating conditions. There are many indicators that reflect a company's profitability. Commonly used indicators include net profit rate of main business, net profit rate of assets, return on capital, net profit rate of sales, gross profit rate of sales and return on net assets.

1. The net profit rate of main business is an important indicator reflecting the profitability of enterprises. The higher the index, the stronger the enterprise's ability to obtain profits from its main business income. There are many factors that affect this index, mainly including commodity quality, cost, price, sales quantity, period expenses and taxes.

2. The net interest rate of assets is mainly used to measure the ability of enterprises to make profits by using assets, which reflects the utilization efficiency of total assets of enterprises and shows the amount of net profit that enterprises can obtain by unit assets. The higher the ratio, the stronger the profitability of all assets of the enterprise. This indicator is directly proportional to the net profit rate and inversely proportional to the average total assets;

3. The higher the rate of return on capital, the better the economic benefit of the enterprise's own investment, and the smaller the risk of investors, which is worth investing and continuing to invest. Therefore, it is an important basis for investors and potential investors to make investment decisions;

4. The net profit rate of sales refers to the percentage of net profit and sales revenue, which reflects the net profit of every 65,438+0 yuan sales revenue and represents the income level of sales revenue;

5. Gross margin is the percentage of gross profit in sales revenue, in which gross profit is the difference between sales revenue and sales cost. Gross profit margin of sales refers to how much money can be used for expenses and profit formation in various periods after deducting sales costs from sales revenue of 65,438+0 yuan. The gross profit margin of sales is the basis of the company's net profit rate, and it is impossible to make a profit without a large gross profit margin;

6. The return on net assets reflects the profitability of the owner's investment in the enterprise. The higher the return on net assets, the stronger the profitability of owners' equity. The factors that affect this index are not only the profit level of the enterprise, but also the size of the owner's equity. For owners, the greater the ratio, the stronger the profitability of investors' capital investment.

Reply time: 202 1- 12-29. Please refer to the latest business changes announced by Ping An Bank in official website.