IFA - filolodzy angielscy 2009

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The profitability of a business is highly important when it comes to knowing whether the company is bringing the expected results. Learn how to calculate . NO TIME TO READ? DOWNLOAD THE FREE PDF NOW Name Email What is profitability How to calculate profitability Profitability and profitability: what is the difference Calculating profitability is a mandatory exercise for any manager or business owner. This is because it is not enough to just know how to carry out strategic planning or manage stocks satisfactorily . Managing a company involves managing many other areas, such as cash flow management , financial management, people management, customer management, POS management and much more. But in addition to managing, a good manager must also keep in mind that he must know how to count and measure the results of each of these actions. He must know where the company's strengths and weaknesses are in terms of profitability and profitability and know how to establish an action plan that is capable of finding the balance point in the company's finances.

As there are many areas for a single person to manage, there are metrics to facilitate this management and thus be able to delegate tasks to competent employees. As the success of a company is the result of these different areas, together with a good business plan and a good marketing plan , it is up to the manager, or entrepreneur, to know how to manage the teams that work in each of these areas and UK Phone Number know how to use the metrics necessary to carry out this monitoring. Among the main metrics of this type is the calculation of profitability, which is the subject of this post. First of all, however, let's understand what this profitability is. What is profitability Profitability is an index that is calculated to analyze the performance of a company or project . This metric serves to verify whether the investments made in the company are bringing the expected returns in the short and long term.



It is by calculating profitability that you will know, for example, whether the initial capital that you and your partners invested in the company is returning to it and how long it will take for this investment to fully return, reaching the financial break-even point of the company. your business. This indicator evaluates the company's net profit in a given period and relates it to the amount invested to open the company, at the beginning. This way you find out if the company is “paying for itself” or how long it will take to “pay for itself”. Before getting into the calculation, let’s remember some concepts: Net profit: The value of net profit is obtained by relating the difference between your sales revenue and your company's total expenses in the period, in the following formula: Net profit Total Revenue – Total Costs In other words, net profit is the money left over from your revenues after you have already paid your company's fixed costs and variable costs for the period.
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