What makes some companies more profitable than others? What are the similarities and differences between profit and profitability? Provide real-world examples to support your answer.

Answer 1

Good management is the key factor in assuring that a company is profitable. That means that a company must produce a desirable product for which the customers will pay a fair price. Google is an example of a profitable company. However, many women's clothing stores may be profitable one year, yet the profits decline drastically a year or two later. This is because the company hasn't kept up with changing women's fashions. Chico comes to mind.

For the differences between profit and profitability, check this site.

http://goliath.ecnext.com/coms2/gi_0199-1317/Comparing-profit-and-profitability-profit.html

Answer 2

Think also about the banks who lent huge sums of money to people who couldn't repay the loans. Not profitable!