What term is used for the ratio that measures the total value of property against net annual profit?

The term that describes the ratio measuring the total value of property against net annual profit is known as the Return on Capital Ratio. This ratio is pivotal in assessing the efficiency of an investment by comparing the net profit generated to the total capital employed. It essentially reflects how well the capital investments are being utilized to generate profits.

In agricultural contexts, this ratio helps farmers and investors analyze the profitability of their resources. A higher return on capital ratio indicates a more efficient use of resources, suggesting that the property is generating a satisfactory net profit relative to its total value.

The other terms listed serve different purposes in financial analysis. The Return on Investment measures the overall efficiency of an investment, typically comparing the gain or loss against the initial cost, but does not specifically focus on property value. The Net Profit Ratio examines the profitability of a company, calculating how much net income is generated as a percentage of revenue. The Gross Margin Ratio, on the other hand, assesses the difference between sales and the cost of goods sold, excluding other expenses, providing insight into production efficiency rather than capital efficiency.