23 Profitability performance measures
‘Profit is not the legitimate purpose of business. The legitimate purpose of business is to provide a product or service that people need and do it so well that it’s profitable.’
James Rouse, US real estate developer, civic activist and philanthropist
In a nutshell
Profit is often heralded as the key financial goal of a business.
It is more important, however, to measure profit in the context of the investment required to generate that profit. Return on investment, as opposed to profit alone, is a superior measure of financial success.
To achieve long-run viability a business must ensure that its return on investment is greater than its cost of finance.
Need to know
Why is this important?
To achieve ...
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