Profitable

We explain what something profitable or profitable is, how it relates to expectations and how it influences investments.

A graph shows the evolution of a profitable investment
An investment that generates profits is profitable.

What is something profitable?

Something is said to be profitable or profitable when periodically reports some type of profit or economic benefit. This is a term commonly used in business and finance, usually as a desirable feature of any type of investment. Synonyms of this word are: “lucrative”, “fruitful”, “advantageous”, “profitable” or “beneficial”.

The word “profitable” comes from the Latin term redituswhich in turn comes from the verb redeem, that is, “return”. Already in its origins in Roman Antiquity, this word was used to refer to that portion of an investment or income that periodically returns to the person who made it.

Therefore, when a person invests in a business and said investment later generates dividends, it can be said that he has collected revenues: a portion of money that returns to your hands (in the case of a loan, an interest). Thus, if an investment generates this type of compensation over time, it is an investment profitable either profitablesince in the long run it will make the investor receive more money than they initially put in.

For example, if a capitalist partner invests ten thousand dollars (10,000 USD) in shares of a technology company that is going through a moment of expansion, and the shares he purchased from said company generate monthly returns of one thousand dollars (1,000 USD), in ten months you will have recovered your investment (10 x 1,000 USD) and from now on you will be receiving benefits. He will have made, therefore, an extremely profitable.

On the other hand, if the monthly returns were ten dollars (10 USD) instead of a thousand, the investor would not consider his investment as a good business, since he would have to wait years to recover his investment and be able to start making profits.

You may be interested:  Logistics

Even so, what an investor considers profitable It does not necessarily have to coincide with what someone else thinks about it, since The profitability of an operation also depends on certain expectations of recovery of the investment and profits to be obtained.. In fact, different risk assessment companies alert or advise investors regarding which businesses may be more profitable than others, and what are the risk margins involved in each one.

Continue with: Onerous

References

  • “Profitable” in the Language Dictionary of the Royal Spanish Academy.
  • “Radication of the word Profitable” in the Online Spanish Etymological Dictionary.
  • “Profitable” in Wiktionary.