The profitability of a company

It is said that a company is profitable when it generates sufficient income or profit, that is, when your income is greater than its expenses, and the difference between them is considered acceptable.
But right when evaluating the profitability of a company is to evaluate the relationship between earnings and benefits, and investment or the resources used to obtain them.
And to find this profitability, we make use of indicators, induces, ratios or profitability reasons, of which the main are:
ROA
The rate of return on assets (ROA by its acronym in English) measures the profitability of a company with respect to assets it owns. ROA gives an idea of how efficient a company is using its assets to generate profits.
The ROA formula is:
ROA = (profits / assets) x 100
For example, if a company generates profits of 4000, and has total assets of 30 000, applying the formula of ROA:
ROA = (4000 / 30 000) x 100
It gives us an ROA of 13.3%, ie, the company has a return of 13.3% over the assets held. Or, in other words, the company uses 13.3% of its total assets in generating profits.
ROE
The rate of return on equity (ROE by its acronym in English) measures profitability of a company of the assets it owns. The ROE gives us an idea of a company’s ability to generate profits through the use of capital invested in it and the money it has generated.
The formula for ROE is:
ROE = (Utilities / Equity) x 100
For example, if a company generates profits of 4000, and has a heritage of 60 000, applying the formula for ROE:
ROE = (4000 / 60 000) x 100
It gives an ROE of 6.6%, ie, the company has a yield of 6.6% with respect to the assets it owns. Or, in other words, the company uses 6.6% of its assets in generating profits.
Return on sales
The return on sales ratio measures the profitability of a company with regard to the sales it generates.
The formula for the rate of return on sales is:
Return on sales = (Utilities / Sales) x 100
For example, if a company generates profits of 4000, and obtained the same period net sales of 20 000, applying the formula for return on sales:
Return on sales = (4000 / 20 000) x 100
It gives us a return on sales of 20%, ie, the company has a yield of 20% compared to sales. Or, in other words, earnings represent 20% of total sales.