Which of the following best describes the concept of profitability?

Profitability refers to the ability of a business to generate a profit from its operations. This concept encompasses not just revenue generation but also the management of expenses. When we talk about profitability, we are specifically interested in the overall gain that a business achieves after all revenues are taken into account and all costs of doing business are subtracted. This means that profitability reflects the difference between total income and total expenses, indicating how efficiently a company utilizes its resources to maximize its financial returns.

In contrast, while total income from sales is a crucial component that contributes to profitability, it does not give a complete picture because it does not account for the costs involved. Total expenses incurred, on the other hand, highlight the costs but similarly do not reveal the profitability itself. Finally, the number of employees on the payroll is unrelated to the financial outcome of business operations and does not pertain to the concept of profitability directly. Thus, the best description of profitability indeed emphasizes the overall gain from business operations, which is captured in the correct choice.