KPIs that Determine Profitability Ratios

Profitability measures a company's ability to generate earnings considering sales, assets and equity. It highlights a company's efficiency for gaining profits. It is an important element to the company’s investors, as it is one of the deciding factors that affects the dividend policies of the company. The list of predefined KPIs to determine Profitability Ratios are: - 

• Asset Turnover

• Gearing Ratio

• Gross Profit

• Gross Profit (LTD)

• Gross Profit (YTD)

• Gross Profit Margin

• Gross Profit Margin (YTD)

• Net Profit Margin

• Operating Margin 

• ROE

An example of how one of these KPIs can help your business grow is, by using the Asset Turnover KPI you can track the asset turnover ratio which is used to measure the efficiency of how well a company uses assets to produce sales. A higher ratio is favorable, as it indicates a more efficient use of assets.