Tuesday, February 13, 2024

Review of Guide to Profitability by Hetal Shah

This book review was written by Eugene Kernes   

Book can be found in: 
Intriguing Connections = 1) How To and Not To Run a Business, 2) How To Allocate Resources?

Watch Short Review


“Profit is a deeply moral concept, since without profit we will suffer, not from exploitation, but from a misallocation of resources, a failure to provide the goods and services that the economy needs, the nation’s loss of tax revenue, a reduction in employment and the inability to provide for social change.” – Hetal Shah, Chapter: Introduction

“You can decrease the cost of revenue by decreasing the fixed costs such as rent, utilities, equipment, and by decreasing variable costs like raw materials, delivery, commission and payroll.  Please note that decreasing fixed costs may compromise the reputation of the company, and decreasing variable costs may compromise the integrity and quality of the products/services sold.” – Hetal Shah, Chapter: The Income Statement

“If you find a positive number when looking at ROI, you know the company has a sound return, and that it uses borrowing to expand, rather than using debt to survive.  Make sure that the ROI excludes income from capital improvements made with debt.” – Hetal Shah, Chapter: Profitability Ratios

Excerpts with permission from the Author.


Is This An Overview?

Profit enables the appropriate allocation of resources.  Profit is a social motivator of change.  There are many ways that profit outcomes can be adjusted.  Various profit metrics that a business can use to improve their financial status are found in this reference book.  Profit itself is a term for the remaining revenue when costs are taken into account. 

Profit can be improved through increased revenue, or reduced costs.  Changes that appear simple, but are complex in practice.  Reducing costs can hinder product quality, which effects the reputation of the business.  The business itself might have a quality product, but has competitors that are more efficient.  This book is a short guide on what to look for when considering changes that effect the business.  



As a reference book, there is not much analysis on the metrics.  As each business is different, each business may need to use different methods and focus on different metrics to improve their business.  

Questions to Consider while Reading the Book

•What is the raison d’etre of the book?  For what purpose did the author write the book?  Why do people read this book?
•What are some limitations of the book?
•To whom would you suggest this book?
•What is profit?
•How does profit effect society?
•How does profit effect the business?
•How can your business increase profits? 
•How to improve revenues?  Are there consequences to improving revenues?
•What are the different revenue models? 
•How to reduce costs?  Are there consequences to reducing costs?
•What are profit metrics/ratios?
•What are Earnings per Share? 
•What does ROI indicate? 

Book Details
This book was provided by the author
Publisher:               Independently Published
Edition ISBN:         9781099968822
Pages to read:          34
Publication:             2019
1st Edition:              2019
Format:                    Paperback

Ratings out of 5:
Readability    5
Content          3
Overall          3