Which one of the following is not a part of the Profitability Ratios:

The correct answer is A. Operating Ratio.

Profitability ratios are a group of financial ratios that measure the profitability of a company. They are used to assess a company’s ability to generate profits from its operations. The most common profitability ratios are:

• Return on assets (ROA): This ratio measures how profitable a company is relative to its assets. It is calculated by dividing net income by total assets.
• Return on equity (ROE): This ratio measures how profitable a company is relative to its equity. It is calculated by dividing net income by shareholders’ equity.
• Return on capital employed (ROCE): This ratio measures how profitable a company is relative to the capital it has employed. It is calculated by dividing net income by capital employed.
• Gross margin/sales ratio: This ratio measures the percentage of sales that a company keeps as gross profit. It is calculated by dividing gross profit by sales.
• Operating margin/sales ratio: This ratio measures the percentage of sales that a company keeps as operating profit. It is calculated by dividing operating profit by sales.
• Net margin/sales ratio: This ratio measures the percentage of sales that a company keeps as net profit. It is calculated by dividing net profit by sales.

Operating ratio is not a profitability ratio. It is a measure of a company’s efficiency in managing its costs. It is calculated by dividing operating expenses by sales. A high operating ratio indicates that a company is not managing its costs efficiently.

I hope this helps! Let me know if you have any other questions.