Profitability ratios are the financial ratios which talk about the profitability of a business with respect to its sales or investments. Since the ratios measure the efficiency of operations of a business with the help of profits, they are called profitability ratios. They are quite useful tools to understand the efficiencies / inefficiencies of a business and thereby assist management and owners to take corrective actions.
Profitability ratios are the tools for financial analysis which communicate about the final goal of a business. For all the profit oriented businesses, the final goal is none other than the profits. Profits are the life blood of any business without which a business cannot remain a going concern. Since, the profitability ratios deal with the profits, they are as important as the profits.
The purpose behind calculating the profitability ratios is to measure the operating efficiency of a business and returns which the business generates. The different stakeholders of a business are interested in the profitability ratios for different purposes. The stakeholders of a business include owners, management, creditors, lenders etc.
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) has market capitalization of $46.13 billion while its Price to book ratio was 11.58. The company offered EPS of $2.92 while its 225.81 million shares were outstanding. Gross profit margin of the company was 90.70% while its operating profit margin was 36.40%. The company earned $ 588.90 million in prior 12 months. ROE ratio was 18.40% while ROA was 14.70%.
Zillow Group Inc (NASDAQ:Z) has 77.30% institutional ownership while its EPS ratio was -2.05. The company has 58.70 million shares outstanding while market capitalization of the company was $4.89 billion. Price to book ratio was 1.53. Net profit margin of the company was -24.80% while gross profit margin was 90.60%. Stock volatility for the month was booked as 3.23% while for the week was recorded as 2.90%.
Tableau Software Inc (NYSE:DATA) has return on equity ratio of 0.20%. The company has $8.99 billion in market worth. Gross Profit margin is maintained at 90.30%. Earnings per share of the company were $-0.06 while 71.15 million shares were outstanding. The company earned $1.50 million in prior twelve months.
500.com Ltd (NYSE:WBAI) offered EPS of $0.34. The stock has market capitalization of $698.28 million. The company has 3.95 prices to book (P/B) ratio while P/S ratio was 7.37. Shares of the company were below versus 20 days simple moving average with -13.81% while below its SMA 50 with -11.73%. Net Profit margin was 13.20% while gross profit margin was 90.20%.