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 |
| 8.40% |
| 326.91 |
| 14.29% |
| 0.64 |
| 0.16 |
| -52.56% |
| 1.64 |
| 0.94 |
| -0.66 |
| 1.98 |
| 0.99 |
| -0.06 |
| 0.00% |
| 1.00 |
| Q1 | Q2 | Q3 | Q4 | Q5 | Q6 | Q7 | Q8 | Q9 | Q10 |
| 11.66% | 7.78% | 9.02% | 9.38% | 8.67% | 10.47% | 11.34% | 10.94% | 11.14% | 10.17% |
| 628.31 | 285.16 | 373.29 | 402.38 | 346.98 | 499.92 | 590.93 | 547.83 | 569.87 | 472.12 |
| 20.68% | 18.29% | 19.97% | 19.49% | 17.82% | 17.47% | 16.84% | 16.92% | 16.00% | 17.55% |
| 0.64 | 0.50 | 0.54 | 0.56 | 0.56 | 0.66 | 0.72 | 0.70 | 0.74 | 0.64 |
| 0.22 | 0.14 | 0.18 | 0.17 | 0.19 | 0.21 | 0.23 | 0.22 | 0.25 | 0.24 |
| -52.63% | -54.55% | -50.75% | -56.48% | -45.99% | -48.74% | -48.81% | -50.34% | -45.17% | -42.02% |
| 1.76 | 1.55 | 1.61 | 1.61 | 1.58 | 1.71 | 1.78 | 1.76 | 1.83 | 1.67 |
| 1.04 | 0.75 | 0.81 | 0.86 | 0.85 | 1.03 | 1.18 | 1.11 | 1.20 | 1.03 |
| 0.15 | -0.43 | -0.32 | -0.11 | -0.26 | -0.19 | -0.05 | -0.20 | -0.08 | 0.05 |
| 5.57 | 5.94 | 7.47 | 4.41 | 3.61 | 2.95 | 2.61 | 3.56 | 2.74 | 3.16 |
| 1.26 | 1.14 | 1.03 | 1.22 | 1.03 | 1.26 | 1.26 | 1.12 | 1.18 | 1.18 |
| -0.09 | -0.08 | -0.09 | -0.08 | -0.08 | -0.07 | -0.07 | -0.07 | -0.07 | -0.07 |
| 4.77% | 1.41% | 2.00% | 2.31% | 1.98% | 3.72% | 4.63% | 4.34% | 4.81% | 3.76% |
| 1.18 | 1.09 | 1.22 | 1.21 | 1.12 | 1.09 | 1.06 | 1.05 | 0.99 | 1.05 |
Login
