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Uses and Limitations of Profitability Ratio Analysis in Managerial Practice

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  • ¼ubica Lesáková

    (Faculty of Economics, Matej Bel University)

Abstract

The evaluation of profitability performance appears an important lesson for our managers. Numerical measures of performance are valuable tools, but their use must be kept in perspective. It is short-sighed to manage strictly by the numbers. Executives need to take broader, more qualitative view of the evaluation process. Firms are too complicated to allow the substitution of mechanical rules for creative thought. In my paper will be presented the quantitative and qualitative approach to the profitability ratio analysis, as well as the uses and limitations of profitability ratios in managerial practice.

Suggested Citation

  • ¼ubica Lesáková, 2007. "Uses and Limitations of Profitability Ratio Analysis in Managerial Practice," Proceedings-5th International Conference on Management, Enterprise and Benchmarking (MEB 2007),, Óbuda University, Keleti Faculty of Business and Management.
    • Handle: RePEc:pkk:meb007:259-264
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    File URL: http://www.kgk.uni-obuda.hu/sites/default/files/24_Lesakova.pdf
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    Cited by:

    1. Perisa, Ana & Kurnoga, Natasa & Sopta, Martina, 2017. "Multivariate Analysis Of Profitability Indicators For Selected Companies Of Croatian Market," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 8(3), pages 231-242.

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