4 ways to measure profitability and grow your business | Seth David @Nerd Enterprises, Inc.
Learn more about measuring profitability and growth: https://intuit.me/2WVyxaj
Evaluating your bottom line goes beyond how much money is in your bank account. It requires an accurate analysis of business activities to gain an insightful look at your business profitability. In fact, a profitable business can still go under if cash flow is not good. So we need to look at both profits and cash flow. In this video, Seth David (@Nerd Enterprises, Inc.) illustrates 4 ways to measure profitability margin ratios, break-even analysis, ROA (Return on assets) calculation, and ROI (Return on investments) calculation. Watch for actionable tips on how to increase your business profitability.
00:00 – Introduction
01:07 – What is profitability?
01:32 – How to measure profitability
02:03 – How to calculate the gross profit margin ratio
02:35 – How to calculate the operating profit margin ratio
03:00 – How to calculate the net profit margin ratio
03:27 – What is the break-even point?
03:57 – How to calculate the break-even point: BEP formula
04:21 – Return on assets (ROA) vs. return on investment (ROI)
05:25 – Ways to improve profitability
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