Profitability Ratios | A-Level, IB & BTEC Business

Discover the main profitability ratios and how to calculate them with this video.

VIDEO CHAPTERS
00:00 Introduction
00:28 Recap - what is profit?
01:33 Two ways of measuring profit
02:08 Profit in financial statements
02:37 Gross profit margin
02:53 Operating profit margin
03:21 Net profit margin
03:42 Return on capital employed
04:11 Worked example

#alevelbusiness #businessrevision #aqabusiness #tutor2ubusiness #alevels #edexcelbusiness #businessalevel

Overview
Profitability ratios look at the returns earned by a business both in terms of its trading activities (sales revenue) and also how much is invested in earning those returns (capital employed). This revision video introduces the four main profitability ratios.

[eliteevildarkness]

Systematically explained
No stone unturned
Perfect for those who have a slight understanding of the income statement.

[sasharianrobinson]

Watched three videos before this and they were truly helpful, thank you.

[augustineewhenji]

Thanks so much for the simplified lecture. I look forward to more lectures from you. Cheers.

[jenniferwilson]

Best explained teaching so far for the day sir, I really do appreciate your help with this video, This man Romero pieto is so underrated he have helped alot of people to get up to their feet I am included in making profit in my recent investment he is a straightforward man.

[anoymousa]

Ratios were always hard... God bless you! Thank you so much 🐼

[taiwofakoya]

When calculating the gross profit margin, or ratios in general, do you include or exclude exceptional items?

[fishstring]

Understood much simpler than my teacher thank u

[SuccessMindset]

1. Profitability is a little bit more complex than profit
2. Profit in financial statements is hard
3. Return on capital seems useful

[SunshinMaria]

thank God cuse I found ya', u the best sir!

[RSANGKORCAPITALGROUPCoLt-xszt]

thank you so much for your contribute to safe business

[zihamabdi]

Thank you alot helpful explanation 👏👏👏🙏🙏🙏

[jem]

So educative, great, pls do videos on activity & market ratios

[skittlebug]

Thank you for this clear explanation! Is it also correct to use NET PROFIT divided by EQUITY (or Capital Employed) to calculate Return on Capital Employed? This is how it was explained in my Accounting Class. If the two options are valid, what would be the difference?

[melm]

I am sort of finding it hard to find all the videos for Business Finance Unit 3 BTEC. I know there are AQA A-LEVEL BUSINESS REVISION PLAYLISTS but I still have to sift through them to find the right videos. Has anyone created playlist with all of the video relating to this topic?

[lazaruselungat]

So helpful to me
Its a pretty nice explanation

[harishankarshikkulal]

for ROCE is it ok if I used Net profit/capital employed times 100