In the analysis of profitability of enterprises consider several indicators. Return on assets is the profit received by the organization to the average value of assets in percentage terms. This measure shows how much profit is obtained on each ruble advanced in production assets.
ROI, or return on invested capital, to determine the effectiveness of the use of funds invested in the development of the firm. This indicator is calculated as the difference between the ratio of profit before taxation to balance sheet total (in percentage terms) and the amount of short-term liabilities.
Most often in the analysis of activity of the enterprise used indicator of profitability of production. It is defined as the ratio of the profit of the organization, remaining at its disposal, and total cost of goods sold. Profitability of products shows how many cents of profit the company will receive for each ruble of investment costs. This indicator can be calculated as for the organization as a whole and in its units, as well as individual products. This coefficient depends on changes in the structure of sales, its cost and the level of sales prices.
Another popular measure of profitability is return on sales. It is calculated as the ratio of profit from sales the proceeds from its sale. Another of his name – norm of profitability. Profit margin shows what proportion of profit in total revenue. If at the enterprise the indicator in the dynamics is reduced, then it indicates a decrease in demand for its products and reduced competitiveness in the market.