Profitability Ratios – Excel Model

Ivan Kitov
Ivan Kitov

Profitability ratios gauge how profitable a company is. In simple terms, an organization is profitable when the revenue it generates is higher than the sum of its expenses.

Using a firm’s Balance Sheet and Income Statement, one could easily calculate a number of profitability metrics. This Excel template illustrates how to calculate the following multiples:

  • Gross Profit Margin
  • Operating Profit Margin
  • Pre-tax Margin
  • Net Profit Margin
  • Return on Assets (ROA)
  • Operating Return on Assets (ROA)
  • Return on Total Capital (ROC)
  • Return on Equity (RoE)

Other related topics you might be interested to explore are Ratio analysis, Company valuation, and Forecasting.

This is an open-access Excel model in XLSX format that will be useful for anyone who wants to work as an Accountant, Financial Analyst, Finance Manager, or Investor.

You can now download the Excel template for free.

Profitability ratios are included in the Financial Reporting module of the CFA Level 1 Curriculum.