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Profitability

Profitability ratio indicates a company's profitability compared to that of other companies within the industry, in ralation to previous years and provide a measure of the managements effectiveness as shown by returns generated through sales and investments.

Some examples of profitability ratios are:
1. Return on total assets.
2. Return on equity.
3. Pre-Interest return on assets.
4. Return on invested capital.

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