decreased profitability

How Can a Company Identify Decreased Profitability?

Identifying decreased profitability involves regular financial analysis and monitoring key performance indicators (KPIs). Some common methods include:
Financial Statements: Analyzing income statements, balance sheets, and cash flow statements to identify trends and anomalies.
Ratio Analysis: Using profitability ratios such as gross profit margin, net profit margin, and return on investment (ROI) to assess financial performance.
Budget Variance Analysis: Comparing actual performance against budgeted figures to identify discrepancies.

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