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 |
| 8.77% |
| 497.21 |
| 14.71% |
| 0.65 |
| 0.17 |
| -52.56% |
| 1.63 |
| 0.96 |
| -0.60 |
| 1.37 |
| 0.98 |
| -0.06 |
| 0.00% |
| 1.00 |
| Q1 | Q2 | Q3 | Q4 | Q5 | Q6 | Q7 | Q8 | Q9 | Q10 |
| 10.83% | 7.62% | 8.71% | 9.67% | 8.57% | 9.56% | 10.12% | 10.71% | 10.58% | 9.35% |
| 788.79 | 376.47 | 490.20 | 610.83 | 473.38 | 596.43 | 676.06 | 768.57 | 747.93 | 568.54 |
| 20.57% | 18.35% | 19.67% | 18.91% | 17.67% | 17.39% | 17.03% | 17.10% | 16.62% | 17.80% |
| 0.60 | 0.49 | 0.53 | 0.58 | 0.56 | 0.61 | 0.65 | 0.68 | 0.69 | 0.59 |
| 0.21 | 0.14 | 0.17 | 0.17 | 0.19 | 0.20 | 0.21 | 0.21 | 0.23 | 0.22 |
| -52.63% | -54.55% | -50.75% | -56.48% | -45.99% | -48.74% | -48.81% | -50.34% | -45.17% | -42.02% |
| 1.68 | 1.51 | 1.57 | 1.62 | 1.56 | 1.62 | 1.66 | 1.71 | 1.73 | 1.58 |
| 0.99 | 0.74 | 0.80 | 0.91 | 0.85 | 0.95 | 1.05 | 1.08 | 1.10 | 0.94 |
| 0.20 | -0.39 | -0.30 | -0.12 | -0.24 | -0.19 | -0.05 | -0.19 | -0.12 | 0.02 |
| 4.88 | 4.83 | 6.68 | 4.23 | 3.06 | 2.45 | 1.93 | 2.71 | 1.88 | 2.33 |
| 1.28 | 1.18 | 1.04 | 1.13 | 1.03 | 1.25 | 1.19 | 1.15 | 1.18 | 1.19 |
| -0.09 | -0.08 | -0.08 | -0.08 | -0.08 | -0.07 | -0.07 | -0.07 | -0.07 | -0.08 |
| 4.23% | 1.24% | 1.84% | 2.76% | 1.92% | 2.89% | 3.44% | 4.04% | 4.05% | 2.84% |
| 1.13 | 1.08 | 1.17 | 1.14 | 1.09 | 1.07 | 1.06 | 1.05 | 1.02 | 1.06 |
