Analysis of companies’ economic performance using the profitability rates

Abstract

Studying the economic profitability provides information concerning the efficiency of the patrimony management and the corresponding remuneration of the invested capital. Therefore, the analysis of the economic profitability rates is an instrument of appreciating the economic performance of companies, also of their competitiveness, and it is useful in substantiating the decisions of investors, managers, creditors and of the other user categories. This paper presents and illustrates within a suitable case study, the significance of the economic profitability rate in accordance with its expression under the material aspect or of the patrimony financing sources, also depending on the activity cycle whose efficiency is analysed. Additional information related to the companies’ increasing capacities of economic performance can be obtained by studying the factors that influence the level and evolution of the economic profitability rate using some economic-financial analysis models.