This article focus to Define and Discuss on Profit Margin Ratios. Profit Margin Ratios are utilized by investors and analysts to judge a company’s ability to generate earnings compared to its competitors and other industry players. They also highlight this strength and efficiency of your company’s business model. You’ll find two types of Profit Margin Ratios; profit perimeter ratios and rate of return ratios. While profit margin ratios are utilized to judge the efficiency with how the company earns profits, rate of return ratios provide information of the efficiency with which the company employees its assets as well as other available resources.