What is profitability?

What is profitability and how does a one compute profitability?
asked Dec 14, 2012 in Financial Planning by answernest

1 Answer

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Profitability is used primarily to describe any ongoing process in which a good or a service would produce more benefits than consequences.
More Details:

Profitability is a term used by corporations and financial experts when they discuss whether to make or sell a good or service.  It is an expectation of making more income from sales of the good or service than they spend performing the services or making the goods.  Profitability is different from "profit" in that profitability is an idea or expectation while the "profit" is the physical result.

An example would be during debt consolitation - profitability would be used to describe the steps you would take to get out of debt.
answered Dec 14, 2012 by answernest