profitability

USAGE SUMMARY

'profitability' is correct and usable in written English.
You can use it to describe a situation when a business or activity generates a profit. For example: The company's profitability has increased significantly since they changed their business strategy.

✓ Grammatically correct

News & Media

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

SSE, which became the first of the big six firms to raise its gas and electricity prices at the end of 2013 when it put them up by 8.2%, said the increase in retail operating profits to £456.8m brought profitability only back to where it was in 2012.

The Guardian - Business

Then, of course, came the figures for the Sun.* As I reported on 17 December, the stand-out feature in News UK's overall loss in the 2013-14 period was the plunge in the profitability of the Sun, where operating profits were down to £35.6m from £62.1m.

The Guardian

And it is looking for bargains in Russia, Ukraine and Turkey, where profits can grow faster than at home.Mr Müller says that profitability is more important than market share.

The Economist

Forbes ranks it as the second-largest private company in the country, after Cargill, and its consistent profitability has made David and Charles Koch—who, years ago, bought out two other brothers—among the richest men in America.

The Economist

The firm attempted to maintain its profitability by marginally reducing the proportion of revenue set aside to pay staff to 36.8% from 36.9%.

The Guardian - Business

He admitted that the presence of hen harriers was a threat to the profitability of the grouse shoots.

The Guardian

So-called "stranded" assets could cause major damage to oil companies' profitability, Lamb said.

The Guardian

Renewable technology pays no dividends, has no obvious path to long-term profitability, can easily get disrupted and controls no resources.

The Guardian

The bank said: We have benchmarked [Weir's] oil and gas division against 17 other industrial end markets and show that the current profitability of the business is abnormally high.

The Guardian - Business

"For me, it seems clear that Google Maps are driven by commercial multinational profitability," he says.

The Guardian

HTC has been struggling to find profitability, and cut capacity in 2013 to 38.6m devices - suggesting that Xiaomi will outsell it this year.

The Guardian - Tech

Expert writing Tips

Best practice

When discussing financial performance, use "profitability" to specifically refer to the capacity to generate profit, distinguishing it from broader terms like 'success' or 'growth'.

Common error

Don't assume that high "profitability" automatically means a company is solvent. "Profitability" indicates the ability to generate earnings, while solvency refers to the ability to meet long-term debt obligations. A highly profitable company can still face solvency issues if it has poor cash flow management or excessive debt.

Linguistic Context

The noun "profitability" functions primarily as a subject or object in sentences, referring to the state or quality of being profitable. As Ludwig AI confirms, it accurately describes a situation where a business generates profit. Examples from Ludwig show it used in contexts like 'increase in retail operating profits brought "profitability" only back to where it was in 2012'.

Expression frequency: Very common

Frequent in

News & Media

48%

Formal & Business

32%

Science

20%

Less common in

Encyclopedias

0%

Wiki

0%

Social Media

0%

Ludwig's WRAP-UP

In summary, "profitability" refers to the capacity or state of generating profit, playing a crucial role in business and financial discussions. As confirmed by Ludwig AI, it is grammatically sound and widely used to assess financial performance. With a strong presence in news and business contexts, "profitability" is generally used professionally. When aiming to improve your writing avoid confusing "profitability" with solvency. Remember that while "profitability" measures the capacity of a company to generate profit, solvency defines its ability to meet long-term debt obligations.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

Profit margin

Focuses on the percentage of revenue exceeding costs, indicating efficiency in profit generation.

Return on investment

Emphasizes the gain from an investment relative to its cost.

Financial performance

A broader term assessing overall financial health and success.

Revenue generation

Highlights the process of creating income, a prerequisite for profitability.

Earnings power

Indicates the capacity to produce earnings or profits.

Commercial success

Implies profitability through market acceptance and sales achievements.

Economic viability

Focuses on the ability to sustain economic activity, including profitability.

Wealth creation

Broader term to include all activities that create wealth

Bottom line

Refers to the net profit after all expenses.

Gainfulness

Indicates the ability to produce gains or profits

FAQs

How can I measure "profitability" in my business?

Common metrics for measuring "profitability" include gross profit margin, net profit margin, return on assets (ROA), and return on equity (ROE). These ratios help assess how efficiently your business generates profit relative to revenue, assets, and equity.

What factors can affect a company's "profitability"?

Factors influencing "profitability" include revenue growth, cost of goods sold (COGS), operating expenses, pricing strategies, competition, and overall economic conditions. Effective cost management and strategic pricing are essential for maintaining and improving "profitability".

What are some strategies to improve "profitability"?

Strategies to enhance "profitability" include increasing sales volume, reducing costs, improving operational efficiency, raising prices (if market conditions allow), and diversifying product or service offerings. Focusing on customer retention and loyalty can also drive sustainable "profitability".

What is the difference between "profitability" and "cash flow"?

"Profitability" measures a company's ability to generate profit over a period, while "cash flow" tracks the movement of cash both into and out of a company. A company can be profitable but still experience "cash flow" problems if it doesn't manage its working capital effectively.