Profitability Analysis is a financial assessment that evaluates a company's ability to generate profit relative to its revenue, expenses, and assets. This analysis helps businesses understand their financial health by examining key metrics such as net profit margin, return on assets, and return on equity. By identifying which products or services are most profitable, companies can make informed decisions about pricing, cost management, and resource allocation. Ultimately, profitability analysis supports strategic planning and helps businesses enhance their overall performance in a competitive market.