Ratio Analysis of Profitability: Recording of Accounting Transaction
While businesses speak of profitability every now and then, let us break down the reasons why this is an important concern for everyone on board. Profitability is perhaps one of the major concerns of any business – no doubt – and in financial terminologies, Ratio Analysis of Profitability can help determine the entire outlook of a company and its variable returns to its investors as well.
Ratio Analysis of Profitability allows the entire board of a company to witness its financial profits and losses over a specific time period. We at VFM break down a company’s ratio analysis of profitability into margins and returns for the equity investors to take notice of.
Profitability is an important concern for outside investors – especially if they’re backing up a small business. In order to make dividends meet and to show a competitive profitable ratio to equity investors, it is highly essential for primary business owners to learn more about their company’s performance and efficiency.
Ratio Analysis of Profitability in UAE:
For a company’s optimum performance, Profitability Ratios consists of two compartments as follows:
- Margins: Margins are ratios that define the company’s capability of transforming sales into profits. This can be at any time, stage and duration of the wager or measurement. These are further divided into Gross Profit Margin, Operating Profit Margin, Net Profit Margin and Cash Flow Margin.
- Returns: Returns are ratios that speak for a company’s capability and its efficiency in producing returns for the investors and shareholders on board. Returns Rations comprise of Return on Assets or Return on Investment, Return on Equity and Cash Return on Assets.
VFM Accounting and Bookkeeping Services has therefore acknowledged the overgrowing need of comparative data for thorough financial ratio analyses. We at VFM have also acknowledged the presence of a variety of miscellaneous ratios in accounting that are necessary and mandatory to keep record of for optimum functioning of a company.
These consist of liquidity ratios, asset or efficiency management ratios and debt or financial leverage ratios which should be adjusted and summarized by reputed chartered accountants on paper and computer as well. Our certified public attendants will not only summarize these ratios, but will also curate their reports based essentially on the DuPont Model.
We at VFM hold pride in offering business owners our state-of-the-art yet quick accounting services in Dubai. Amongst our accounting services, we at VFM offer our enthusiastic client base Ledgers Reconciliation Services in Dubai as well.
Equipped with accounting services such as review of VAT Returns, recording of accounting transaction and reconciliation of credit cards, we at VFM Accounting and Bookkeeping Services vow to gain the trust of every business owner in Dubai.