Revenue Projections Show Profit Potential. By Bryn Harman. The value of all common equities is closely tied to the earnings power of their issuers. To assess the value of a stock, an understanding of the issuer's earnings potential in the next quarter, year or even decade, is required. In turn, to properly understand earnings potential investors must evaluate the source for all company earnings and cash flow: revenue. Therefore, one of the most important elements in valuing a stock is projecting the top line of the issuing company.
http://www.investopedia.com/articles/stocks/07/top-line-projection.asp
The two key aspects of profitability are revenues and expenses. Revenues are the business income. This is the amount of money earned from customers by selling products or providing services. Generating income isnt free, however.
http://www.myaccountingcourse.com/accounting-dictionary/profitability
Top 10 facts about the world. Profit potential, often called income potential, is a phrase used in the world of economics and business to describe the potential for a product or plan to make money. The term profit potential is not a definite guarantee of earnings but rather an indicator of what the estimated return on investment may be. Due to the liquid nature of the concept, the term is widely used in business and investment literature, sometimes as a marketing ploy.
http://www.wisegeek.com/what-is-profit-potential.htm
Resources, like cash, are used to pay for expenses like employee payroll, rent, utilities, and other necessities in the production process. Profitability looks at the relationship between the revenues and expenses to see how well a company is performing and the future potential growth a company might have.
http://www.myaccountingcourse.com/accounting-dictionary/profitability
Industry analysis—also known as Porter’s Five Forces Analysis—is a very useful tool for business strategists. It is based on the observation that profit margins vary between industries, which can be explained by the structure of an industry. The Five Forces primary purpose is to determine the attractiveness of an industry.
https://www.marsdd.com/mars-library/industry-analysis-and-competition-using-porters-five-forces/
It goes beyond the behaviour of current competitors. The state of competition in an industry depends upon five basic competitive forces. The collective strength of these forces determines profit potential in the industry. Profit potential is measured in terms of long-term return on invested capital. Different industries have different profit potential—just as the collective strength of the five forces differs between industries.
https://www.marsdd.com/mars-library/industry-analysis-and-competition-using-porters-five-forces/
Profitability is ability of a company to use its resources to generate revenues in excess of its expenses. In other words, this is a companys capability of generating profits from its operations. Profitability is one of four building blocks for analyzing financial statements and company performance as a whole.
http://www.myaccountingcourse.com/accounting-dictionary/profitability
The capacity for making more money in future transactions in business and trading. Profit potential is an important factor in any business or investment plan, and it is often a key element in the assessment of high percentage trades in the various asset markets. You also might like...
http://www.businessdictionary.com/definition/profit-potential.html
Agreeing to realistic goals is the first lesson a fledgling business should learn. Realistic goals should form the backbone of your company and are the most important part of your annual business plan. The most common goals for a business are revenue, profit, sales volume and growth goals. Failing ...
http://www.businessdictionary.com/definition/profit-potential.html
The profit side of the equation is much simpler to calculate. To estimate potential revenue, a reasonable estimate of public demand for the product is created and multiplied by the projected sale price of the product.
http://www.wisegeek.com/what-is-profit-potential.htm
what is profitability potential
Profitability potential is a phrase used in the world of economics and business to describe the potential for a product or plan to make money.