How Can Business Leaders Use Profitability Ratios?
Profitability ratios can be leveraged in various ways by business leaders:
1. Strategic Planning: Leaders can use these ratios to formulate long-term strategic plans. 2. Benchmarking: Comparing ratios with industry standards helps in benchmarking performance. 3. Operational Improvements: Identifying areas of improvement for operational efficiencies. 4. Financial Health: Assessing the financial health of the company to ensure sustainability and growth.