Current ratio
Money earned by a business is called revenue or sales. It represents the total income generated from the sale of goods or services before any expenses are deducted. Revenue is a key indicator of a business's financial performance and is often used to assess its growth and profitability.
current retio
Revenue is the income into the company from Sales or the provision of services. Profitability is an assessment of the companies performance where Revenue & Expenditure are compared and the difference is a profit or loss which thereby indicates the profitability of the business. In simple terms its' ability to make a profit or not.
a leading indicator
An economic indicator which declined during the war was unemployment.
The Return on Assets Indicator or ROA shows the relationship between a company's profits to its actual assets. It is a measure of the company's profitability.
The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.
Profitability index is the "rolling forward" of indices of profitability. For example, a company has a turnover of
Gross margin is a key indicator of profitability as it reveals the percentage of revenue that exceeds the cost of goods sold (COGS). A higher gross margin indicates that a company retains more money from each dollar of sales to cover operating expenses, taxes, and profits. By analyzing gross margin trends over time, businesses can assess their pricing strategies, cost management, and overall financial health. It also enables comparisons with industry benchmarks to evaluate competitive performance.
how is the profitability of scheme determined
these are ratios which analyze profitability of a company. higher ratios imply higher profitability and value of a company.
The price-to-earnings (P/E) ratio is not a direct measure of profitability because it reflects the market's valuation of a company's earnings rather than its actual profitability. It is influenced by factors such as investor sentiment, growth expectations, and market conditions, which can distort the relationship between price and earnings. Additionally, the P/E ratio does not account for differences in capital structure, accounting practices, or one-time expenses, making it an imperfect indicator of a company's financial health. Instead, profitability is better assessed using metrics like net profit margin or return on equity.
diferent Authers definition of profitability
Profitability is an important factor when running a business. Businesses calculate profitability in many ways, but figuring out profits after expenses is their goal. Profitable ratios is a measure of profitability that can be used to assess a business's ability to generate earnings.
trade off between ris and profitability
impact on organizational profitability
Profitability