A profitability trend is the evolution of profit within a business. An upward trend means that profit has generally increased over time in the short or long run. A downward profitability trend means profits are declining. Recognizing problems early in profitability trends gives you a better chance to address revenue and cost issues in play.
Profitability refers to a company's relative ability to generate a profit currently and into the future. However, a new business may not have yielded a quarterly profit, but it could have increasing profitability if its profit trend is improving.
On the contrary, an established business may have generated profit in a recent period, while its recent profitability trends call its future viability into question. In the long run, net profitability is vital to achieving for-profit business objectives. However, profit trends are often a strong sign as to big-picture profitability.
The demonstration of Profitability Trend performance shows the comparison of different quantile portfolios. Portfolios were rebalanced monthly using a market-cap weighted method, with 20 bps deducted as costs per transaction.
| Annual Return |
| Cumulative Return |
| Volatility |
| Sharpe ratio |
| Calmar ratio |
| Max Drawdown |
| Omega ratio |
| Sortino ratio |
| Skew |
| Kurtosis |
| Tail ratio |
| Monthly value at risk |
| Alpha |
| Beta |
| SPY |
| 7.93% |
| 375.08 |
| 14.69% |
| 0.60 |
| 0.15 |
| -52.56% |
| 1.57 |
| 0.87 |
| -0.61 |
| 1.44 |
| 0.94 |
| -0.06 |
| 0.00% |
| 1.00 |
| Q1 | Q2 | Q3 | Q4 | Q5 | Q6 | Q7 | Q8 | Q9 | Q10 |
| 10.62% | 7.27% | 8.26% | 9.15% | 7.95% | 8.95% | 9.60% | 10.30% | 10.00% | 8.65% |
| 685.72 | 319.27 | 405.43 | 497.07 | 376.51 | 475.83 | 549.95 | 639.48 | 599.91 | 444.49 |
| 20.78% | 18.35% | 19.77% | 19.00% | 17.75% | 17.45% | 17.02% | 17.05% | 16.58% | 17.84% |
| 0.59 | 0.48 | 0.50 | 0.56 | 0.52 | 0.58 | 0.63 | 0.66 | 0.66 | 0.56 |
| 0.20 | 0.13 | 0.16 | 0.16 | 0.17 | 0.18 | 0.20 | 0.20 | 0.22 | 0.21 |
| -52.63% | -54.55% | -50.75% | -56.48% | -45.99% | -48.74% | -48.81% | -50.34% | -45.17% | -42.02% |
| 1.67 | 1.49 | 1.54 | 1.60 | 1.52 | 1.59 | 1.63 | 1.68 | 1.69 | 1.54 |
| 0.97 | 0.71 | 0.76 | 0.86 | 0.79 | 0.90 | 1.00 | 1.04 | 1.04 | 0.88 |
| 0.21 | -0.41 | -0.30 | -0.11 | -0.23 | -0.18 | -0.04 | -0.20 | -0.12 | 0.03 |
| 4.87 | 5.07 | 6.82 | 4.35 | 3.14 | 2.54 | 2.05 | 2.89 | 2.01 | 2.43 |
| 1.28 | 1.10 | 1.00 | 1.07 | 1.00 | 1.24 | 1.14 | 1.12 | 1.15 | 1.16 |
| -0.09 | -0.08 | -0.09 | -0.08 | -0.08 | -0.07 | -0.07 | -0.07 | -0.07 | -0.08 |
| 4.77% | 1.64% | 2.21% | 3.06% | 2.07% | 3.06% | 3.68% | 4.40% | 4.24% | 2.95% |
| 1.14 | 1.08 | 1.17 | 1.14 | 1.09 | 1.07 | 1.06 | 1.05 | 1.02 | 1.06 |
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