The Power of Profit

Beschreibung

How can business leaders make better production and capital investment decisions? How can Wall Street analysts improve their predictions of future stock market values? How can government improve macroeconomic forecasts and policies? In The Power of Profit, Anari and Kolari demonstrate how profit measures can be applied as the basis for these and many other applications of economic, policy, financial, and business analysis. The underlying theme of the book is that profitability is the driving force in free market economies. Firms invest in capital, produce goods and services, and generate sales in an effort to reap profits. Firms that are unprofitable exit the marketplace and are replaced by profitable firms. Despite the crucial importance of profits, however, there is no formal model that directly relates profits to capital formation and output. Previous studies over the past 100 years on profit and the economy are mainly descriptive in nature, without any well-specified model grounded in microeconomic theory. Filling this gap, the authors present a profit system model of the firm grounded in basic accounting relationships in addition to the well-known Cobb-Douglas production function, which can be applied to individual firms, industries, and the business sector as a whole. Through rigorous data analysis, the authors show how the profit system model can be applied to: modeling the U.S. business sector and national economy forecasting output, capital stock, total profit, profit rates, and profit margins examining the relationships among profitability, economic growth, and the           business cycle simulating the effects of potential monetary policy changes on the business           sector and national economy valuing the Standard & Poor’s stock market index as well as individual firms The result is a model that integrates microeconomic and macroeconomic factors and that can be widely applied in business and economic decisions, policymaking, research, and teaching.
How can business leaders make better production and capital investment decisions? How can Wall Street analysts improve their predictions of future stock market values? How can government improve macroeconomic forecasts and policies? In The Power of Profit, Anari and Kolari demonstrate how profit measures can be applied as the basis for these and many other applications of economic, policy, financial, and business analysis. The underlying theme of the book is that profitability is the driving force in free market economies. Firms invest in capital, produce goods and services, and generate sales in an effort to reap profits. Firms that are unprofitable exit the marketplace and are replaced by profitable firms. Despite the crucial importance of profits, however, there is no formal model that directly relates profits to capital formation and output. Previous studies over the past 100 years on profit and the economy are mainly descriptive in nature, without any well-specified model grounded in microeconomic theory. Filling this gap, the authors present a profit system model of the firm grounded in basic accounting relationships in addition to the well-known Cobb-Douglas production function, which can be applied to individual firms, industries, and the business sector as a whole. Through rigorous data analysis, the authors show how the profit system modelcan be applied to: modeling the U.S. business sector and national economy forecasting output, capital stock, total profit, profit rates, and profit margins examining the relationships among profitability, economic growth, and the business cycle simulating the effects of potential monetary policy changes on the business sector and national economy valuing the Standard & Poor’s stock market index as well as individual firms. The result is a model thatintegrates microeconomic and macroeconomic factors and that can be widely applied in business and economic decisions, policymaking, research, and teaching.
The first to provide a comprehensive, rigorous, and applied model of profit as an economic driver Both analytical and predictive; can be applied to interpret history and to forecast Principles can be applied to a wide variety of topics, including stock valuation, industry performance, business cycles, strategic management, and effects of monetary policies Authors will supplement the book with on-line tools, including data sets, forecasts, interactive materials, and additional resources Cross-over book, with quantitative and methodological rigor that will appeal to researchers and scholars and practical application that will appeal to business economists, business leaders, bankers, and investors Authors have contacts in the business and policymaking communities Includes supplementary material: sn.pub/extras

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Ali Anari

Themen in »The Power of Profit«

Capital Formation Cobb-Douglas Production Function Corporate Finance Gross Domestic Product (GDP) Investment Productivity Profit Profit-based Model Stock Market Strategic Management Valuation business production

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