Profitability ratios compare income assertion accounts and categories to indicate an organization’s means to generate income from its operations. Traditionally, when debt and equity costs had been excessive, for many firms the commerce-off between profitability and progress favored profitability.
The primary is the descriptive, methods which employs the use of ratio analysis expressed in percentages, illustrative diagrams and notes are used in analyzing the development of the events of the bank understudy, based on the statement from the collected information.
The efficiency ratios indicate that each companies have made some enhancements with a view to change into more proficient at using their resources to generate sales between 2006 and 2007.
However, the profitability index (PI) will consider these two projects comparatively and will give right answer.