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
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
the difference between the revenue and the cost of goods / services sold
costs that the business incurs that cannot be directly related to a revenue activity
overheads as a percentage of revenue
revenue less COG/SS and overheads.
Operating Profit Percentage
operating profit as a percentage of revenue
revenue less COG/SS and overheads
allows for the taxes associated with profits
Net Profit Percentage
as a percentage of revenue
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
Phone +61 3 9428 1062
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