# Profit/Loss Ratio.

The profit/loss ratio is a financial ratio that measures the profitability of a company. It is calculated by dividing the company's net income by its total revenue.

A high profit/loss ratio indicates that a company is more profitable than its competitors. A low profit/loss ratio indicates that a company is less profitable than its competitors.

##### What are the 5 profitability ratios?

1. Gross profit margin: This measures the percentage of sales left after subtracting the cost of goods sold. A higher gross profit margin indicates that a company is better able to cover its overhead costs and generate profits.

2. Operating profit margin: This measures the percentage of sales left after subtracting all operating expenses. A higher operating profit margin indicates that a company is more efficient in its use of resources and is better able to generate profits.

3. Net profit margin: This measures the percentage of sales left after subtracting all expenses, including taxes. A higher net profit margin indicates that a company is more efficient in its use of resources and is better able to generate profits.

4. Return on assets: This measures the percentage of profits generated from a company's assets. A higher return on assets indicates that a company is more efficient in its use of resources and is better able to generate profits.

5. Return on equity: This measures the percentage of profits generated from a company's equity. A higher return on equity indicates that a company is more efficient in its use of resources and is better able to generate profits. What are the three main profitability ratios? The three main profitability ratios are gross margin, operating margin, and net margin.

Gross margin is a measure of a company's profitability based on its revenue. It is calculated by dividing a company's gross profit by its revenue.

Operating margin is a measure of a company's profitability based on its operating expenses. It is calculated by dividing a company's operating income by its revenue.

Net margin is a measure of a company's profitability based on its net income. It is calculated by dividing a company's net income by its revenue.

##### Which is also known as profit and loss statement?

A profit and loss statement (P&L) is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period of time, usually a fiscal quarter or year. The P&L statement is one of the three major financial statements that businesses use to assess their financial performance, along with the balance sheet and cash flow statement.

How do you calculate PNL ratio? There are a few different ways to calculate PNL ratio, but the most common is to divide net income by total revenue. This will give you a percentage that represents how much profit your company is making for every dollar of revenue.

Another way to calculate PNL ratio is to divide net income by operating expenses. This will give you a percentage that represents how much profit your company is making for every dollar you spend on operating expenses.

You can also use PNL ratio to compare the profitability of different companies. To do this, you would need to calculate the ratio for each company and then compare the results. What gearing ratio means? Gearing ratio is a financial ratio that compares debt liabilities to equity. The gearing ratio is also known as the debt-to-equity ratio. A higher gearing ratio indicates a company has more debt than equity. A lower gearing ratio indicates a company has more equity than debt.