Profitability ratio a group of ratio that show the combined effects of liquidity,asset management,and debt on operating results. Operating margin this ratio measures operating income,or EBIT,per dollars of sales;it is calculated by dividing operating income by sales. =EBIT/Sales Profit margin this ratio measures net income per dollars of sales and is calculated by dividing net income by sales. =Net incomes/Sales Return on total assets(ROA) the ratio of net income to total assets. =Net income/Total assets Return on common equity(ROE) the ratio of net income to common equity;measures the rate of return on common stockholders' investment. =Net income/Common equity Return on invested capital(ROIC) the ratio of after-tax operating income to total invested capital;it measures the total return that the company has provided for its investors. =EBIT(1-T)/Total invested capital Basic earning power ratio this ratio indicates the ability of the firm's assets to generate operating income;it is calculated by dividing EBIT by total assets. =EBIT/Total assets