To measure how much money your business operations generate.
Gross Profit Margin
To measure the percentage of revenue your business retains after subtracting the cost of goods sold.
Operating Profit Margin
To measure the profitability of your business operations after subtracting all operating expenses, excluding interest and taxes.
Net Profit Margin
To measure the percentage of revenue your business retains after subtracting operating expenses, including the cost of goods sold, operating expenses, and taxes.
Return on Assets (ROA)
To measure the efficiency with which your business uses its assets to generate profit.
To measure your business's ability to pay short-term obligations like accounts payable and short-term debt.
Similar to the current ratio, the quick ratio excludes inventory from the calculation. It measures how well your business is equipped to pay short-term obligations.
Interest Coverage Ratio
To measure your business's ability to pay interest expenses on any debt it has incurred.