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Insofar as the trajectory of capitalist development is, as Marx argues, ruled by the quest for extra surplus-value, the economic fate of the system can be summarised as an interaction between the tendency of the profit rate to decline, and the factors that counteract it: in other words, the permanent battle to reduce costs, increase sales and ...
In total, costs are 275 €. Sales of 300 € minus costs of 275 € gives a profit of 25 €. 25 € in relation to an initial capital investment of 500 € gives a rate of profit of 5 %. From year to year capital can grow at a rate of 5%, if all profits are invested or accumulated.
Following a matching principle of matching a portion of sales against variable costs, one can decompose sales as contribution plus variable costs, where contribution is "what's left after deducting variable costs". One can think of contribution as "the marginal contribution of a unit to the profit", or "contribution towards offsetting fixed costs".
This price equals the cost-price and normal profit on production capital invested which applies to the new output of a specific enterprise when this output is sold by the enterprise (the "individual production price" [32]). The rate of profit involved in this production price can be compared to the average rate of profit that obtains for a ...
The justified P/S ratio is calculated as the price-to-sales ratio based on the Gordon Growth Model. Thus, it is the price-to-sales ratio based on the company's fundamentals rather than . Here, g is the sustainable growth rate as defined below and r is the required rate of return. [1]
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Throughput (T) is the rate at which the system produces "goal units". When the goal units are money [8] (in for-profit businesses), throughput is net sales (S) less totally variable cost (TVC), generally the cost of the raw materials (T = S – TVC). Note that T only exists when there is a sale of the product or service.
Other richly valued momentum names such as Palantir and AMD have sold off more than 10% in the past month as traders price in a more elevated interest rate backdrop — among other factors.