Profitability ratios are key indicators of a company’s financial health and performance. They provide insights into a company’s margin, return on investment (ROI), and ability to generate cash flow.
Various profitability ratios can be used to assess a company’s financial health. However, not all of them are equally important. Some ratios are more relevant to certain industries than others.
A frequent dinner-time question when my children were young was, ‘If you could have one superpower, what would it be?’ (followed by, ‘Do I really have to eat my vegetables?’) After a thoughtful exploration of super-human strength, telekinesis, invisibility, telepathy, shapeshifting, and x-ray vision, I always settled on ‘seeing the future’.
In this segment of Rapid Fire, Joe Connors, a seasoned CFO turned premier banker, tackles 5 questions on funding and banking from Steve.
Today’s workplace – and the world in general – is all about optimization. We use phone apps to order a cup of coffee, weekly groceries, and more for quick pick-up – sometimes without even having to exit our cars. We try to keep up with the ‘speed of business’ by scheduling back-to-back-to-back meetings with little time to refresh or act upon the outcomes of those meetings. We seek out new tools and technology that can streamline tasks – not to lighten our loads, but to allow us to take on ever more daunting levels of productivity.
And we wonder why burnout is at an all-time high.
Businesses often get tied up in hidden red tape. Staff members develop habits and create processes that over time cause delays and increase costs. Sometimes these unnecessary steps are an unforeseen result of company policy. They may be a holdover from a previous ownership. They could be the result of an imperfect amalgamation of companies, where managers adhere to old procedures while imposing the new. All these process kinks accumulate over time, creating inefficiencies that add nothing to customer value.
