Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

One way to determine profitability is to calculate the ratio of profits to other financial metrics, such as sales, assets or equity. Common profitability measures include the net income margin, which ...

Businesses often use profitability ratios to gauge their performance against industry benchmarks or competitors. Calculating these ratios involves a straightforward process, typically using figures ...

To determine the profitability of banks, simply looking at the earnings per share isn't quite enough. It's also important to know how efficiently a bank is using its assets and equity to generate ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Our profitability index metric looks at a firm's ability to convert revenue into profits. This metric, introduced in 1985, seeks to demonstrate which firms best balance leverage and profit margin for ...