abhishreshthaa
Abhijeet S
The concept of overall profitability ratio has been given much attention in the recent years, particularly in the field of financial management, where it is used to determine whether a certain goal has been achieved or is an alternative use of capital justified? Further, it is also used as a basis for various managerial decisions.
Overall profitability ratio is the only measure which can be said to show satisfactorily, the overall performance of an undertaking from the stand point of profitability.
It enables the management to show whether the funds entrusted to it have been properly used or not.
Thus, it can become an integral part of the budgetary control system in order that the management may be able to follow the progress being made and to take corrective action, if necessary.
Overall profitability ratio is the only measure which can be said to show satisfactorily, the overall performance of an undertaking from the stand point of profitability.
It enables the management to show whether the funds entrusted to it have been properly used or not.
Thus, it can become an integral part of the budgetary control system in order that the management may be able to follow the progress being made and to take corrective action, if necessary.