What is profitability control?

What is profitability control?

Profitability control is a mechanism of monitoring the sales made, profits earned and expenditure incurred by a company. The relative profit earning capacity of a firm’s products and consumer groups can be determined via profitability control. Sometimes surpisingly, it may be found out by companies how a small proportion of their products and even customers actually account for a significant percentage of the company’s profits. This can be achieved through profitability control. At times when the companies earn surplus profits, then such profits may even be ploughed back or reinvested. This also forms part of profitability control.