The profitability of a publicly traded company drives the value of its equity as investors primarily care about the profits their investments generate. For example, the most common ratio is the Net Profit Margin - of the revenue generated, how much is profits? Additionally, Return on Investment measures the amount of profit made on an investment. Both these ratios are important for investors prior to investing because they can understand the profitability of a company or the cost structure (the inverse of profit).
Additionally, profitability ratios can be used to understand what percentage of the revenue is available to cover expenses. This is calculated using the Gross Profit Margin, which looks at how much money is generated to cover expenses after the cost of goods are subtracted from the revenue.
Net Profit Margin =Net Income/Revenue
Return on Investment = Profit/Investment
Gross Profit Margin = Gross Profit/Revenue
You can find these values on the company’s balance sheet/income statement