profit ratios
- Created by: amandacygal
- Created on: 30-01-15 09:28
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- profitability ratios
- profit margins
- Gross profit margin
- the fraction of every pound spent by customers not used to make a product
- gross profit/sales
- shows how much profit is left after costs
- Gross profit margin
- net profit margin
- fraction of every pound a customer spends that the business keeps
- net profit/sales
- RETURN ON CAPITAL EMPLOYED-profit to capital ratio
- measures how the business turns invested money into net profit
- profit is made in proportion to the capital that has been invested
- a high ROCE is good for investors
- ROCE= net profit / capital employed
- a high ROCE is good for investors
- profit margins
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