Profitability Meaning: Definition, Examples, and Translations
๐ฐ
profitability
[หprษfษชtษหbษชlษชti ]
Definition
business
The state or quality of being profitable, especially in business.
Synonyms
Examples of usage
- The company's profitability has increased significantly in the last quarter.
- Investors are interested in the profitability of the new venture.
Translations
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Interesting Facts
Economics
- Profitability is measured using various metrics like gross profit margin, net profit margin, and return on investment.
- High profitability can indicate a competitive advantage in a market, making businesses more appealing to investors.
Business Practices
- Companies often focus on improving profitability through cost-cutting, increasing sales, and optimizing operations.
- Sustainable profitability is crucial for the long-term health of a business, ensuring it can weather downturns.
Psychology
- Research shows that businesses with higher profitability also tend to invest more in employee satisfaction, creating a positive feedback loop.
- The perception of profitability can influence consumer trust; profitable companies are often viewed as more stable and reliable.
Technology
- The rise of e-commerce has transformed profitability, providing new avenues for businesses to reach customers directly.
- Data analytics tools have significantly enhanced companies' ability to measure and improve their profitability.
Origin of 'profitability'
Main points about word origin
- The word comes from the Latin 'profitare', meaning 'to advance' or 'to make a profit'.
- It entered the English language in the 15th century, combining 'profit' with the suffix '-ability' to indicate potential.
The word 'profitability' originated from the Old French word 'profitabilite', which in turn came from the Latin word 'profitabilitas'. The concept of profitability has always been crucial in economics and business, reflecting the ability of an entity to generate revenue and income that exceeds the costs and expenses involved. Understanding profitability is essential for assessing the financial health and sustainability of any business or investment.
See also: nonprofit, profit, profitable, profitableness, profitably, profiteer, profiteering, profitize, profits.