Profitability ratios are financial metrics used to assess a company's ability to generate profit relative to its revenue, assets, or equity. Common examples include the net profit margin, which measures how much profit a company makes for every dollar of sales, and the return on equity (ROE), which indicates how effectively a company uses shareholders' equity to generate profit. These ratios help investors and analysts evaluate a company's financial health and operational efficiency. By comparing profitability ratios over time or against industry benchmarks, stakeholders can gain insights into a company's performance and make informed decisions regarding investments or management strategies.