The profitability with the form of a Rate or a financial Ratio indicating the mathematical relationship between a result obtained and the means in capital implemented to obtain it.

The rate of profitability is often expressed in Pourcentage.

Two types of rate of profitability

One generally distinguishes two great types of rate of profitability according to the type of capital implemented taken as reference.

The first is the " profitability of the Stockholders' equity ". It is also called " Return one Equity" or " ROE". It is calculated by dividing the clear benefit of the exercise by the amount of the stockholders' equity of the company. It thus expresses the capacity of the funded capital by the shareholders to release a certain level of benefit.

The second is the " profitability of capital investis". He is also called " Return one Assets" or " ROA". It is calculated by dividing the benefit before interests of the loans and after taxes by the sum of the stockholders' equity and the financial debts (in other words the sum of the Passif S of " high of Assessment "). It expresses the capacity of the funded capital to create a certain level of benefit before debt.

It acts however in both cases of immediate profitability. A more prospective approach uses the Rate of profitability interns calculated starting from the money flows awaited in the future.

Close concepts

The Rendement is a concept used rather by the savers and investors concerning their placements, in particular atfixed rate, that for the internal financial performances of the companies.

The Productivité (or physical output) is the report/ratio of a quantitative element to a financial element or the ratio of two quantitative elements. For example, one will bring back the turnover of a company to manpower of this company to express the apparent productivity of an employee. Or then, one will report the number of produced vehicles per hour worked to express the labor productivity.

Profitability also differs from profitability, or the Taux of margin. This last is the relationship between the turnover and the Bottom line, and expresses the capacity of the turnover to create a certain level of benefit.

See too

• Productivity
• Rate of rotation of the stations of Credit
• Break-even point
• Return on investment or KING

External bond

• Ratios of profitability (site perso)

Be-X-old: Рэнтабэльнасьць

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