The concept is as old as business itself. To be profitable, you have to earn more money than what you spend in the process of producing the goods and/or services you trade. And, this may be the only business concept that hasn’t changed as the markets evolved. However, the application of this concept went through different stages as the markets became more and more sophisticated.
Different aspects of a company’s operations are more important than others at different times. From time to time, the interest for a company shifts from overall profitability to earnings per share to EBIT and/or other ratios depending on the industry in which the company under consideration is involved, its growth prospects, the economic outlook of the company’s country of operations and the international economic situation — to mention only a few.
This is only an excerpt of Do You Know Your Company’s Value?
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