Blog & Resources
11 Profitability Measurements to Understand
Measuring and understanding the profitability of a business is vital to its success.
The accounts that help to measure and effect your profitability include:
Profit and Loss | Increase | Decrease | |
Revenue | the total amount the business generates from the sale of its goods and / or services |
| |
Revenue Growth Percentage | the percentage change in revenue from one period to another | | |
Gross Margin | the difference between the revenue and the cost of goods / services sold | | |
Overheads | costs that the business incurs that cannot be directly related to a revenue activity | | |
Overheads Percentage | overheads as a percentage of revenue | | |
Operating Profit | revenue less COG/SS and overheads. | | |
Operating Profit Percentage | operating profit as a percentage of revenue | |
|
EBITDA | revenue less COG/SS and overheads | | |
Net Profit | allows for the taxes associated with profits | | |
Net Profit Percentage | as a percentage of revenue | | |
Retained Profits | accumulated of net profits / losses less dividends paid to shareholders | | |
If you would like to discuss further, please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandco.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.au
Please refer to disclaimer at the bottom of the page.