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Corporate profitability analysis is an important part of financial analysis. Profitability refers to the ability of a company to make profits. The stronger the company's profitability, the higher the return it gives to shareholders and the greater the company's value. The evaluation indicators of financial profitability analysis are as follows:

1. Core indicators

1) Capital profit rate = total profit/total capital. Also known as capital return rate, it reflects the profitability of capital

2) Sales net profit (operating net profit) = net profit/sales revenue. Reflects how much net profit is achieved per 1 yuan of income

3) Operating profit rate = (total profit + sales tax) / operating income. Reflects how much profit and tax is achieved for every 1 yuan of operating income

4) Cost and expense profit rate = total profit/total cost and expense. Examine the relationship between enterprise costs and profits, and explain how much profit is achieved for 1 yuan of cost

5) Asset return (yield) rate (productivity ratio) = (net income + interest expense + income tax) / average total assets < /p>

. Examine the rate of return on all capital used by the enterprise and measure the efficiency of asset utilization

6) Marginal profit margin (critical rate of return) = 1 - variable cost rate = marginal contribution/sales revenue = unit marginal contribution/sales Unit price, total contribution margin = total sales revenue - total variable costs, unit contribution margin = sales unit price - unit variable costs

. Examine the impact of changes in marginal profit on sales profits

7) Profit rate on current assets = total profit/average occupation of current assets. Examine the relationship between current asset occupation and profit

8) Fixed asset profit rate = total profit/average balance of fixed assets. Examine the relationship between fixed asset occupation and profit

9) Net income to sales ratio = (net income + interest expense) / sales revenue. Reflects the amount of income obtained by each unit and illustrates the profitability of the enterprise

10) Ratio of owner's equity to sales = owner's income/sales revenue. Observe the capital strength of each unit sold

11) The speed of change in expense level = (expense level in the reporting period - expense level in the base period) / expense level in the base period. Examine the trend of changes in corporate expense levels

12) Cost of sales and expense ratio = total costs/sales revenue. Examine the costs and expenses for every 1 yuan of sales revenue

13) Equity coefficient = total assets/total owners’ equity = 1/total owners’ equity/total assets=1÷(1-debt ratio). Examine how many times the total assets are the owners’ equity

14) Equity return (income) rate = net assets/owners’ equity. It is the most representative and comprehensive profitability indicator in the financial indicator system of the DuPont System in the United States. Examine the return on investment

2. Joint-stock company indicators

1) Return on common stock equity = (net income - preferred stock dividends) / average common stock equity. Measuring the profitability of common shares

2) Earnings per share of common shares = (Net income - Preferred stock dividends) / Number of common shares. Reflects the earnings per share of ordinary shares

3) Stock price-to-earnings ratio = Price per share of ordinary shares/Earnings per share of ordinary shares. Reflects the multiple of the market price per share equal to the earnings per share, and measures the rationality of the market price

4) Dividends per share = total ordinary dividends distributed/number of ordinary shares. Reflects the earnings per share of ordinary shares

5) Dividend distribution rate = cash dividend per share/earnings per share. Examine the proportion of dividends distributed by the company to net income per share

6) Securities yield = interest (dividends) + the difference between the closing price and the opening price of the security’s face value/the opening price of the security (the yield of the security holding period ). Reflects the income earned by investors from securities investments

7) Dividends and stock price Interest rate = dividend per share/market price per share. Reflects the profitability of the current price per share

8) Shareholders' equity ratio = total shareholders' (owners') equity/total assets. Reflects the proportion of owners' equity in total assets and measures the degree of protection of owners' equity

9) Income and interest coverage ratio (interest income multiple) = operating profit/interest expense. Reflects the degree of protection of profits against interest payable

10) Income to preferred shares = net income + interest expense + income tax. Used as preferred stock analysis

11) Cash flow per share = (net income + depreciation) / number of common shares outstanding. Reflects the cash flow provided by each common share capital

12) Dividend payout rate = dividends per share of common shares/profit per share of common shares. Measuring the extent of common stock dividend payments

13) Book value per share of common stock = common stock equity/number of outstanding shares of common stock.

Measuring corporate shareholder equity in the event of merger and bankruptcy