Meaning & Definition of word "Profitability"
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Profitability
/ˌprɒfɪtəˈbɪlɪti/
noun:
- 1. The state or condition of yielding a financial profit or benefit.
- Example: The company's profitability improved significantly after they streamlined their operations.
- 2. The degree to which a business or investment yields a profit.
- Example: Investors are always looking for opportunities with high profitability.
- 3. The capacity to generate earnings as compared to the expenses incurred.
- Example: The profitability of the project will be evaluated after the first quarter.
- 4. A measure of financial success, typically expressed as a ratio of profit to revenue or investment.
- Example: Higher profitability ratios indicate better financial health for the business.
Etymology
Derived from the word 'profit', combined with the suffix '-ability' indicating a quality or state.
Common Phrases and Expressions
profit margin:
The difference between sales and net income, expressed as a percentage of sales.
return on investment:
A measure used to evaluate the efficiency or profitability of an investment.
break-even point:
The point at which total revenues equal total costs, resulting in neither profit nor loss.
Related Words
profit:
The financial gain made in a transaction.
revenue:
The total income generated from business operations.
cost:
The amount of resources expended for something.
Slang Meanings of profitability
Meaning: In the black
Example Sentence: The company is finally in the black after years of losses.
Meaning: In the green
Example Sentence: Once the sales increase, we should be in the green by next quarter.