We explain what is the profitability and its types that are distinguished. In addition, its indicators and its relationship with risk.
When we talk about profitability, we refer to the ability of a given investment to yield benefits greater than those invested after waiting for a period of time. It is a fundamental element in economic and financial planning , since it means having made good choices.
There is profitability, then, when a significant percentage of the investment capital is received , at a rate considered adequate to project it over time. It will depend on the profit obtained through the investment and, therefore, determine the sustainability of the project or its suitability for partners or investors.
Commonly distinguishes between economic, financial and social profitability:
The indicators of profitability in a business or a company are those that serve to determine the effectiveness of the project in the generation of wealth, that is, that allow to control the balance of expenses and benefits , and thus guarantee the return.
The risk of an asset or a company depends on its ability to generate return , that is, to provide profits and comply with all agreed financial terms, once the expiration date has been reached.
Thus, it is the product of an evaluation of the probability of payments: the greater the possibility of default or breach of the contractual terms, the greater the margin of risk assigned.
This indicator is not only used to assess the economic profitability of companies , but also of countries. The risk margin of each entity will depend on the solvency they present to their creditors and the guarantees that are incorporated into the security.
Cryptocurrency has captivated the world since Bitcoin's mysterious arrival in 2009. It began as a…
Hello, Guys Welcome to our Website. Today we will give you information about a Famous…
Alkenes are chemical elements with double bonds or carbon double bonds. Its general formula is…
Logical semantics is a branch of logic that focuses on studying the meaning of statements…
The Game Boy Advance (GBA) was a popular handheld gaming system developed using the Game…
Soft Puzzle - Drop The Slime APK - Simple and Easy! But that's why this…