ResourceCenterBookkeepingCashFlowInvoicingTaxesPayrollExpensesToolsResourceCenterBookkeepingCashFlowInvoicingTaxesPayrollExpensesToolsSeptember18,2019September18,2019https://quickbooks.intuit.com/r/pricing-strategy/4-ways-to-measure-your-profitability/PricingStrategyen_USProfitabilityisthedifferencebetweenabusinessthat’sboomingandonethat’sabust.Findouthowtocalculatethiskeymetricandimproveyourratio.https://quickbooks.intuit.com/cas/dam/IMAGE/A9UM1rXF3/20a4290e7124f534dbdbfa6a1bec57b91.jpghttps://quickbooks.intuit.com/r/pricing-strategy/4-ways-to-measure-your-profitability/FourwaystomeasureprofitabilityandgrowyourbusinessChrisScottPricingStrategyFourwaystomeasureprofitabilityandgrowyourbusinessByChrisScottSeptember18,2019FacebookTwitterLinkedInMessengerToday’sbusinesswordofthedayis“profitable.”AccordingtotheunabridgedMerriam-WebsterEnglishDictionary,thedefinitionofprofitableis,“affordingprofits:yieldingadvantageousreturnsorresults.”Thesaurus.comprovidessomerelatedwords,including“beneficial,”“cost-effective,”and“fruitful.”Otherrelevantwordsinclude“gainful”and“money-making.”Antonymsinclude“fruitless”and“valueless.”Mostbusinessownersunderstandprofitabilityfromafundamentalstandpoint.Iftherevenuefromsalescoversyourexpenses,you’returningaprofit.Profitsmeanpositivecashflow.Positivecashflowhelpskeepyourbusinessinoperation.Profitablenesstendstobeoneoftheprimarygoalsofbusinessowners.Theyseektohaveaprofitableexperienceandcapitalizeonmaterialgain.However,businessownersshouldlookbeyondasimpleprofitdollaramount.Thebasicdollaramountdoesn’tindicatewhythebusinessisprofitable.Analyzingkeymetricscanhelpbusinessownersdeterminewhethertheircompanyishealthy,andprofitabilityissustainable.Bycalculatingandcomparingmetrics,ownerscanidentifytheareasofthebusinessthatareworkingwell—andthosethatneedimprovement.Broadlyspeaking,therearethreeprimarywaystodeterminewhetheryou’reaprofitablebusiness:marginorprofitabilityratios,break-evenanalyses,andreturnonassetassessments.Inthisarticle,we’llprovideyouwit