PROFITABILITY - A MEASURE OF THE ORGANIZATION'S ACTIVITY QUALITY
PROFITABILITY - A MEASURE OF THE ORGANIZATION'S ACTIVITY QUALITY

Summary/Abstract: AS A LEGAL AND ECONOMIC ENTITY AND REGARDLESS THE LEGAL STATUS, THE ORGANIZATION KNOW DURING ITS ACTIVITY THE NEED TO MEASURE ITS CAPABILITIES, STRENGTHS AND WEAKNESSES DERIVED FROM VARIOUS REASONS SUCH AS IMPROVING PERFORMANTELOR OR STRATEGIES, THE TRANSFER OF PROPERTY UNDER THE FORM OF PARTIAL OR TOTAL TRANSACTIONS BY WAY OF PARTICIPATIONS, MERGERS OR SALES. SINCE FROM THE PROCESS OF CREATING AN ORGANIZATION, THE AIM IS TO CARRY OUT ACTIVITIES IN CONDITIONS OF EFFECTIVENESS AND EFFICIENCY. THEN, DURING THE FUNCTIONING, ANY ORGANIZATION MUST ADAPT TO THE NEW CONDITIONS THAT APPEAR IN ITS INTERNAL AND EXTERNAL ENVIRONMENT, ADAPTATION THAT OFTEN REQUIRES AN ORGANIZATIONAL DEVELOPMENT, BY IMPROVING THE STRATEGY AND THE ORGANIZATIONAL STRUCTURE, THAT WOULD LEAD TO INCREASING THE EFFECTIVENESS OF SPECIFIC ACTIVITIES. IN THIS ARTICLE I WILL DISCUSS THE FOLLOWING CONSIDERATIONS:THE NEED TO EVALUATE THE COMPANY'S PROFITABILITY; CHOICE OF ANALYSIS SOURCES AND TECHNICAL METHODS; CALCULATION AND EVALUATION OF PROFITABILITY OF SALES (GROSS AND NET), RETURN ON ASSETS (TOTAL ASSETS, FIXED AND CURRENT ASSETS), RETURN ON EQUITY; DETERMINING THE INTERNAL AND EXTERNAL FACTORS THAT INFLUENCE THE PROFITABILITY OF THE ORGANIZATION; INTERNAL AND EXTERNAL USERS OF THE ORGANIZATION'S PROFITABILITY ANALYSIS. THE EVALUATION OF THE QUALITY OF THE ORGANIZATION IN TERMS OF PROFITABILITY CAN BE SUCCESSFULLY APPLIED TO COMPANIES OF DIFFERENT SIZES AND ACTIVITIES. THIS MAKES POSSIBLE TO OBJECTIVELY ASSESS THE EFFICIENCY OF THE COMPANY'S BUSINESS, POTENTIAL RISKS, COMPETITIVENESS AND CONTINUITY POSSIBILITIES.

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