How to measure profits and why it matters

Low-cost production and improving gross margin per unit are important if wanting to make a profit in the cattle business. In his most recent column, Alan Newport explores various measures of profitability and why they matter. 

We tend to get our understanding of profit measurements confused. At least I do.

Last week, I had lunch and a good conversation with my old friend Jay Franklin, a no-till farmer from Vinita, Okla., who has always been an economist at heart and, for several years now, a banker, too.

I was lamenting the change in business attitudes in corporate America, how 10% was once considered a good return but now most companies want 20-30%.

Jay asked me if I was confusing return on investment with return on equity.

To read Newport's entire column, click here.

 

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