Lucrative
Candlefocus EditorLucrative is an adjective used to describe something, an idea, a venture, or a product that creates significant financial returns. For a product to be deemed lucrative, it must generate substantial profits in net returns, as opposed to gross receipts. It is important to note that something that is ‘lucrative’ is only leveraged in the past-tense; being ‘lucrative’ in the present-tense indicates potential, not an actuality.
It is possible for investors to analyze a company’s current financial metrics and financial statements to determine whether or not the company is in a lucrative position. For example, in 2019, Apple Inc. was deemed one of the most profitable companies in the world (according to Fortune 500’s 2019 Global 500 list). Based on this information, Apple Inc. can be defined as one of the most lucrative companies in the world due to their high returns.
Several financial metrics and measurements can help indicate if a business is lucrative; of these metrics include profit margin, operational efficiency, market size and share, financial solvency and liquidity, return on assets (ROA) and return on equity (ROE).
In essence, ‘lucrative’ is a word used to describe a product or venture that generates substantial profits. Various metrics can help analysts and investors determine whether or not a company is actually lucrative. One of the most lucrative companies in the world is Apple Inc.; who, through various financial metrics, alone can be proven to have manageable debt, high liquidity and overall, a sturdy and productive situation.