Return on equity (ROE):
Posted: Mon Dec 23, 2024 8:56 am
In other words, the profit of a business can be reduced because the company is much more indebted than its competition, or because it can reduce the taxable base of corporate tax thanks to losses from previous years.
In short, to know the profitability percentage of our business, something basic before taking any measure is to make a quotient between the operating result (EBIT: profit before interest and taxes) of the profit and loss account and the total assets (current and non-current) of the company's balance sheet.
measures the owner's profitability by phone number for business comparing the total profit obtained with the shareholders' capital . In this case, we use the total profit after all expenses (i.e. including interest and corporate tax) because that is the real profit that the business owner will obtain.
In short, to know the percentage of profitability that we obtain as owners, we must make a quotient between the company's result or net profit (BDI: Profit after Taxes) from the profit and loss account and the capital contributed by the partners as well as the accumulated results (net worth) from the company's balance sheet.
What actions can we take to improve profitability?
Therefore, there are two factors that we must focus on to improve the company's profitability:
Measures on the profit and loss account (company profit):
Outsourcing services instead of taking them on internally, for example accounting or sales work.
In short, to know the profitability percentage of our business, something basic before taking any measure is to make a quotient between the operating result (EBIT: profit before interest and taxes) of the profit and loss account and the total assets (current and non-current) of the company's balance sheet.
measures the owner's profitability by phone number for business comparing the total profit obtained with the shareholders' capital . In this case, we use the total profit after all expenses (i.e. including interest and corporate tax) because that is the real profit that the business owner will obtain.
In short, to know the percentage of profitability that we obtain as owners, we must make a quotient between the company's result or net profit (BDI: Profit after Taxes) from the profit and loss account and the capital contributed by the partners as well as the accumulated results (net worth) from the company's balance sheet.
What actions can we take to improve profitability?
Therefore, there are two factors that we must focus on to improve the company's profitability:
Measures on the profit and loss account (company profit):
Outsourcing services instead of taking them on internally, for example accounting or sales work.