Question

is your business being profitable?why have you said so?​

Answer 1

Answer:

To be successful and remain in business, both profitability and growth are important and necessary for a company to survive and remain attractive to investors and analysts. Profitability is, of course, critical to a company's existence, but growth is crucial to long-term survival.

KEY TAKEAWAYS

When evaluating a company, what should you weigh heavier: profitability or growth?

A growing company may not be earning any profits yet, but may nevertheless provide a great investment opportunity.

Other times, a lack of profitability can be a huge red flag that something is wrong with the firm.

Profitability

A company's net profit is the revenue after all the expenses related to the manufacture, production, and selling of products are deducted. Profit is "money in the bank." It goes directly to the owners of a company or shareholders, or it is reinvested in the company. Profit, for any company, is the primary goal, and with a company that does not initially have investors or financing, profit may be the corporation’s only capital.

Without sufficient capital or the financial resources used to sustain and run a company, business failure is imminent. No business can survive for a significant amount of time without making a profit, though measuring a company's profitability, both current and future, is critical in evaluating the company.

Although a company can use financing to sustain itself financially for a time, it is ultimately a liability, not an asset.

An income statement shows not only a company’s profitability but also its costs and expenses during a specific period, usually over the course of a year. To compute profitability, the income statement is essential to create a profitability ratio. A number of different profitability ratios can be calculated from which to analyze a company's financial condition.