Profitability Analysis

Profitability Analysis is a financial evaluation that examines how efficiently a company generates profit compared to its costs, revenues, and assets. It involves calculating key metrics like profit margins and return on investment to understand how much money a company keeps from its sales after expenses. This analysis helps stakeholders, like investors and managers, assess financial health, identify strengths and weaknesses, and make informed decisions to improve performance. In essence, it provides insights into how well a business is turning its activities into profits.