What Is Profit Potential?

Profitability is the ability of a company's capital to increase in value, which usually manifests itself in the size and level of the company's income. Profitability indicators mainly include six operating profit margins, cost expense margins, multiples of surplus cash protection, return on total assets, return on net assets and return on capital. In practice, listed companies often use indicators such as earnings per share, dividends per share, price-earnings ratio, and net assets per share to evaluate their profitability.