The profit margin ratio measures the portion of every dollar that you earn that you keep as profit. The profit margin ratio is reported in the form X:1, where X is the profit per dollar. For example, ...

Discover how ratio analysis simplifies comparing company financial health. Learn key ratios like P/E and net profit margin to boost your investment decisions.

One of the most essential aspects of launching and operating a business is selling enough goods or services to pay for the company's costs. If a company can't earn enough to cover its costs, it loses ...

It's important to emphasize that you need to account for all revenue, including operating revenue and non-operating revenue, such as investment income. Similarly, be sure to account for all expenses, ...

Look for high profitability ratios to identify companies efficiently turning revenue into profits. Analyze margin and return ratios to assess how well a company manages its costs and assets. Compare ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Opinions expressed by Entrepreneur contributors are their own. Being an entrepreneur for more than 30 years has taught me how important it is to track data about my business. But, I didn’t always take ...