Question

Decision makers and analysts look deeply into profitability ratios to identify trends in a company's profitability

Answer 1

Company’s profitability is important for a business to survive and remain strong in giving the benefits that shareholder or investors expect. Profitability ratios help measure a company's ability to generate income and profits based on its invested capital. In addition, most analysts and decision makers used these ratios as an indicator of certain aspects of a company's performance.