It is effectively the return the firm has made, and investors will want this to be higher than the rate of interest they could have got elsewhere. Profit margin - this measures the level of profit compared to the turnover. It therefore shows the percentage profit on the sales. It can be measured as either a gross or net profit margin. These are ratios that measure the liquidity of the firm.
Firms have to ensure that they have the liquidity required to meet all their commitments.
They need to be able to have sufficient assets to convert into cash, and can't afford to have all their assets tied up as capital. Current ratio - this ratio compares the current assets and current liabilities. Clearly the firm needs to have more current assets than liabilities, and so at a minimum the figure should be more than 1. However, it should probably be quite a bit higher than this to ensure sufficient liquidity. One of the current assets is stock, and this is clearly not always easy to turn into cash.