Join Rudolph Rosenberg for an in-depth discussion in this video Profitability, part of Financial Literacy: Reading Financial Reports.
- [Voiceover] Let's make a pause here…in the review of the income statement…to define one of the most important concepts in finance…and maybe the most important…for discussion here, profitability.…Profitability is the difference between the money…that comes into the company…from sales and other money generating activities…and the money that comes out of the company as expenditures.…In other terms, to ask about the profitability of a company…is the same as to ask if the company is making money.…Is my company profitable?…Is it making money?…If yes, meaning if you generate more money…from your business activities than you spend,…and you have money left in your pocket,…or rather in the company's pocket, then yes.…
Your company is profitable.…If not, that means your company spends more money…than it earns, and it is therefore not profitable.…It is generating a loss.…This is a dire situation for a company to be in,…which requires immediate action to avoid bankruptcy.…In the income statement we calculate different types…
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- What is a financial statement?
- Reading the balance sheet
- Understanding depreciation, liabilities, and equity
- Reading the income statement
- Understanding revenue, costs, profitability, and net income
- How cash flow works
- Analyzing financial documents with context<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
Skill Level Appropriate for all
1. Financial Statements
2. The Balance Sheet
3. The Income Statement
4. The Cash Flow Statement
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