Profitability is a class of financial metrics that are used to assess a business’ ability to generate earnings, compared with expenses and other relevant costs incurred during a specific period of time.
In this section, we will look at four tests of profitability. They are: Net Income, Operating Cash Flow, Return on Assets and Quality of Earnings. From these four metrics, we will establish if the company is making money, and gauge the quality of the reported profits.
- Net Income 2011 = $1.706 billion
To pass, the company needs to have a positive net income. Duke Energy passes.
- Operating Cash Flow 2011 = $2.769 billion
Operating Cash Flow is the cash generated from the operations of a company, generally defined as revenue less all operating expenses, but calculated through a series of adjustments to net income.
To pass, the company needs to have a positive operating cash flow. Duke Energy passes.
To read more: http://seekingalpha.com/article/761091-duke-energy-inside-the-numbers
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