[Verse 1]
When a company sells its goods and wares
The first thing that we need to compare
Is revenue minus what it cost to make
That's gross profit, make no mistake
Take that number, divide by sales
This gross margin never fails
To show us if the business model's sound
Before other costs come around
[Chorus]
G-O-A-N-R, five ratios to take you far
Gross and Operating, Asset, Net, Return on Equity star
G-O-A-N-R, measuring profit near and far
These margins tell the story of how profitable you are
[Verse 2]
Operating margin digs a little deeper
Subtracts the costs that make accountants weeper
Salaries, rent, and marketing too
From gross profit, what comes through?
Divide by revenue, you'll see
How efficient operations can be
Before the interest and taxes hit
This ratio shows management's wit
[Chorus]
G-O-A-N-R, five ratios to take you far
Gross and Operating, Asset, Net, Return on Equity star
G-O-A-N-R, measuring profit near and far
These margins tell the story of how profitable you are
[Verse 3]
Net margin is the bottom line
After everything, what profit's mine?
Interest paid and taxes due
Net income is what filters through
Divide by sales to get the rate
This final margin seals your fate
It shows what shareholders really earn
From every dollar, what returns
[Bridge]
But wait, there's more to analyze
Return on Assets, what a prize
Net income over total assets held
Shows how well resources are compelled
ROE's the king of ratios true
Net income over equity's due
These five together paint the scene
Of profit power, clear and clean
[Chorus]
G-O-A-N-R, five ratios to take you far
Gross and Operating, Asset, Net, Return on Equity star
G-O-A-N-R, measuring profit near and far
These margins tell the story of how profitable you are
[Outro]
From sales to assets, equity too
These ratios will see you through
Profitability's crystal clear
With G-O-A-N-R always near