Profitability ratios are often used to measure management's earnings performance.

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Profitability ratios, such as return on investment (ROI) and net profit margin, are commonly used to evaluate a company's management performance in generating earnings. These ratios compare a company's profits or earnings to its sales, assets, or equity and can provide insight into how efficiently and effectively management is utilizing resources to generate profits.

Profitability Ratios Are Often Used to Measure Management's Earnings Performance