What Determines Profitability?

nomad

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A business will become functional only when you are generating profits. If there is no profit, or let’s say there is a loss, your business will shut down. By the way, what determines the profitability of your business?

A lot of people say, if you sell products in high demand and low in supply, you make a profit. However, I do not think profitability in the business is solely determined by demand and supply. In my opinion, marketing also plays a huge role.

 

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Stardom22

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Profitability is determined by various parameters on the business. For instance, the cost of running of the business is a major factor determining the amount of profits a business person gets out of the business.

 

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Passiveearner

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Stardom22 said:

Profitability is determined by various parameters on the business. For instance, the cost of running of the business is a major factor determining the amount of profits a business person gets out of the business.

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Profitability is a very broad topic. A businesses's profits may depend on the economical conditions as well. This also involves purchasing power of people in the country. Some other factors like demand and supply also may play a really huge role as well.

 

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Stardom22

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In normal circumstances the business profitability is determined by the low cost of production and low buying prices

 

Shavkat

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It can be determined if you conduct a business feasibility study. In this way, the results from the research can show it is viable to have the business.

 

Starmix

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If you always have good sales every day then it is a sign that you profit every day too.If alll the stocks are sold, that is also another implication of profitability.

 

Sanjeev

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Profitability in a business depends on the sale and the profit margins you have kept for the product or service.

 

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Fidelia

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I think the cost of production and the pricing preferred by the market determines how profitable a business would be.

 

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Every aspect of the operation of a business has a hand in the profitability of that business. From production, to promotion, to actual sales, they all have a hand.

 

eldavis

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I believe your income and expenses should be one of the ways to define this. How much you spend and how much money comes in.