What Does Profitability Mean? Contents [show] Profitability is one of four building blocks for analyzing financial statements and company performance as a whole. The other three are efficiency, solvency, and ma
Profit margin is the measure of a business, product, service's profitability. Rather than a dollar amount, profit margin is expressed as a percentage. The higher the number, the more profit the business makes relative to its costs. Businesses with high profit margins Some businesses and products...
DEI is important because it contributes to an environment where all employees, regardless of background, have fair opportunities to pursue work they’re passionate about while getting to be themselves in the workplace. By bringing in diverse perspectives, organizations also create a space where multi...
Although seemingly unglamorous, it's an essential part of a company's profitability and ability to execute, and it's been one of the hottest topics among investors in the last few years. Here's why and what you need to know. Image source: Getty Images...
What Does Revenue Mean? Revenue is what a business earns from selling its products and services before expenses. Revenue is also called gross sales. The more you sell, the higher your total revenue. Your profit is what’s left over after you deduct your busin...
The status of your cash flow is essential to understand, but it may not be an indicator of overall company health, because it does not calculate profitability or net income. For example, a thriving company can have negative cash flow even if the business is sound because cash inflow timing ...
In contrast, accounting profit focuses solely on explicit costs—those that involve direct monetary payments, such as wages, rent, and raw materials. While this makes accounting profit easier to calculate and interpret, it provides a narrower view of profitability compared to economic profit. ...
In general terms, sustainability is the ability to maintain a specific rate or level. In a business context, it’s about maintaining or improving profitability without doing harm. Until recently, conversations about sustainability typically dealt only with slowing climate change and preserving the plane...
Yes, CLV (Customer Lifetime Value) and LTV (Lifetime Value) mean the same thing — the total revenue a customer brings over their relationship with your business. Q4: Does CLV apply to all industries?Yes, CLV is relevant across industries. While the numbers vary by sector, any business ...
Despite “the bottom line” (profits) often getting all the glory, cash flow—knowing how much cash is in the bank and whether your business is building up or losing cash—is what really matters. Yes, profitability is still important. When your business is profitable, you know that your bu...