define profitability
Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business activities.here are many different ways for you to analyze profitability. This lesson will focus on profitability ratios, which are a measure of the business' ability to generate revenue compared to the amount of expenses it incurs. Let's look at a few of the primary analytical approaches.