Profitability
ˌprɒfɪtəˈbɪləti
Definitions
The capacity to yield a financial profit; the state of being profitable.
ˌprɒfɪtəˈbɪləti
The state or degree of being profitable or yielding profit.
The company's profitability increased significantly due to cost-cutting measures.
💡 Simply: Imagine you're running a lemonade stand. Profitability means how much money you make after paying for all the lemons, sugar, and cups. If you make more money than you spend, your lemonade stand has good profitability!
👶 For kids: When something can make money, that's called profitability.
More Examples
Analyzing the profitability of different product lines helps in making strategic decisions.
Improving the farm's profitability was their primary goal.
How It's Used
"Companies strive to improve their profitability to attract investors."
"The profitability of a new venture is a crucial factor in investment decisions."
From "profit" (late Middle English, from Old French "profit") + "-ability". The suffix "-ability" indicates the capacity or quality of something.
The term gained increased prominence with the rise of modern capitalism and financial accounting practices during the Industrial Revolution.
Memory tip
Think of a 'pro-fit' for the company: it's the company's ability to make money.
Word Origin
"Benefit, gain"