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Profitability ratios, such as the net profit margin, return on assets (ROA), and return on...

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Finance

Profitability ratios, such as the net profit margin, return on assets (ROA), and return on equity (ROE), evaluate a company's ability to generate profits from its operations. These ratios provide insights into how effectively a company is managing its resources to produce earnings. High profitability ratios indicate efficient management and strong financial health, attracting investors and boosting shareholder confidence. They help stakeholders compare performance across companies and industries, guiding investment decisions and strategic planning.

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