Basic profitability
Basic profitability is when a company, product, etc. is producing a profit [Cambridge Online Dictionary].
Understanding the answer to 'what is profitability?' is essential to developing your business and entrepreneurial competencies. It's also essential when pursuing a career in accounting or finance. Profitability is a measure of a business's profit relative to its expenses. In other words, an organization can generate income by using resources that it has available, such as people, time, and equipment.
Profitability is the primary goal of all companies. Because it's the money that business ventures generate through their activities that enables those ventures to grow, develop new products, or enter new markets. Profitability is a relative term that describes a company's situation that generates profit. To calculate an absolute number, you can use this formula:
Profit = revenue from the operation - expenses [Indeed.com].
Profitability. Cambridge Online Dictionary. Retrieved from: https://dictionary.cambridge.org/dictionary/english/profitability
What is profitability?. Indeed.com. Retrieved from: https://uk.indeed.com/career-advice/career-development/what-is-profitability