The profit is a variable, unforeseeable but hoped remuneration risk taken by the holder of a Capital given invested.

Current approach by the countable and financial terminology

The modern companies are complex organizations, that a single financial indicator does not make it possible to characterize. Account should indeed be held:

  • of the Damping of the material capital used
  • of the financial Fresh
  • of the Speculation on the future value of the elements of the company.
  • of obligations contractual or legal of company, and of risks taken, which will result in future expenditure (or shortfalls, if for example a customer goes bankrupt before paying an invoice), more or less dubious (from where the engagement of Provision S).
  • of the degree of control which the company exerts on other companies of which it holds whole or part of the capital, and of the decisions taken with regard to these companies (expenditure or receipts).
  • sometimes, of the Subsidy S
  • of general economic environment. Let us insist on this generally misunderstood point, because apparently paradoxical. If economic environment is good and that the other companies improve their results, then the value of the company which does not grow will drop. Conversely, if the company manages to maintain its results in a context then generally bad (whereas the other companies suffer) its value will increase.

Concept of " profit" is then quite insufficient:

  1. of the subjective elements enters in account. It belongs to the leaders of the company to make their countable choices, under the control of external bodies (the principal ones being certified public accountants and the Fisc).
  2. of the elements out of control of the company also enters in account
  3. the profit is appreciated not in the absolute but by comparison with the performances of the other companies
  4. the various actors of the company need different indicators, because their objectives and their margins of decision are also different

Within the company, one will thus be interested in indicators like

From the point of view of shareholders (point of view which the direction takes into account), one will look

  • the Bénéfice, who is the result of the company returning to his owners. It is the difference between its receipts and its loads (in the contrary case there is loss). It either is distributed to the owners as returned direct (for example Dividende S) or preserved by the company, which increases its thus Stockholders' equity.
  • the financial profit is the benefit minus the Coût of the capital (what would have beared the committed money if it had been placed apart from the company, in or government bond savings account for example). It is in particular used to remunerate the entrepreneurial Risque, but can also comprise a Rente in the case for example of a company in dominant situation on a market of Imperfect competition.
  • the Appreciation, in financial terminology, is a capital gain (difference between the initial setting and the price obtained in the event of resale of the shares of the company). If the difference is negative there depreciation
  • the total Rentabilité for the owner ( " is; total shareholder return" in the case of the shareholder for example) is the total of its incomes and capital gains (dividends, appreciation).

History: positions of the various economic currents

Traditional approach

The traditional approach , that it is liberal or Marxist, does not distinguish profit, Bénéfice and Plus-value.

Accordingly, the appreciation carried out during the transfer of a good or a service is the difference between the withdrawn Prix of the exchange and the unit of the costs undertaken for the development of this good or this service. On the contrary, depreciation is the loss withdrawn of an insufficient sale to cover the expenses undertaken.

The profit, when it is carried out, profits then with (X) the owner (S) from the Capital which carried the Risque of the project.

For example , if:

  • all the costs which were necessary to me to the production and the setting on the Marché of an apple raise to 0,5 euro
  • I find a purchaser paying it to me to 0,7 euro, my profit (one can also say my Profit margin) will be of 0,2 euro.
  • I pay 30% of profits tax this, it fall to 0,14 euro.
So on the other hand, I obtains only 0,4 euro on the market, I make a loss of 0,1 euro.

For the liberal gasoline economists, the profit would represent a right remuneration of the " risque" taken by the holders of the funded capital, essential source of general increase in the richnesses starting from the stage of the Industrial revolution.

Approaches Marxist

According to Karl Marx, it is the work which, only, brings an appreciation to the raw materials which were used to produce the good or sold service. In capitalist mode , the capitalist would exploit the worker by empochant a profit taken on the versed Salaire. With this profit, the capitalist would adapt " work mort" (of the capital), which would enable him to exploit the suppliers of " more and more; work vivant" (workers). It would result from it, according to Marx, a impoverishment of the proletariat (workers deprived of capital).

Still today, the heirs to Marx thus consider that any profit is illegitimate, and must return to paid directly (by pay rises) or indirectly (by the tax, transforming the profit into a forced form of solidarity in connection of those which cannot work).

Tax on the profits

The three independent sources of profits declared fiscally were (in 2003) the Netherlands, Ireland and Bermuda where the benefit are taxed respectively with 5,3%,6,1% and 1,7%. (Le Monde of June 23rd, 2007).

In the social doctrines of the Church

Jean-Paul II recognized the value of the profit in the encyclical Centesimus Annus. He made the promotion of a “democratic capitalism” near to the ideas of the social Crédit, which would like to correct the tax and corporative abuses.

Thus, the Compendium summarizes teaching from these words “the social doctrines recognizes the right function of the profit, like first indicator of the good performance of the company”.

On the other hand, the Church wanted that the profit is distributed from the humanistic point of view. It is from this point of view that she encouraged the foundation of several Coopératives.

The profit is to be distinguished from the Usure, which is a loan provided under unjust conditions.

See too

Simple: Profit

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