profitable

Profitable is an adjective used to describe an activity, venture, or entity that yields a profit—revenues exceed costs. In business, profit is the residual amount after all expenses have been subtracted from revenue, and profitability refers to the ability to sustain such positive results over time.

Measurement of profitability relies on common metrics such as net profit margin (net income divided by revenue), gross margin (revenue minus cost of goods sold as a percentage of revenue), and return on investment. Profitability can be assessed at different levels, including product, project, business unit, or entire company. Profit, however, is not the same as cash flow; profitable operations can still experience cash-flow constraints due to timing or non-cash charges like depreciation.

Several factors influence profitability. Price strategy, demand, production costs, efficiency, economies of scale, and competitive dynamics all play roles. External conditions such as interest rates, access to capital, and regulatory environment can also affect profitability. Sustainable profitability typically requires balancing revenue growth with cost control and the reinvestment of earnings.

In use, profitable describes not only whether an entity is overall profitable, but also whether individual components—such as a product line or project—are financially viable. A venture may be profitable on paper while facing liquidity challenges, and vice versa. Thus, profitability is a central but not sole criterion in evaluating economic performance, often considered alongside risk, volatility, and strategic fit.