“Profit serves three purposes.”

“Profit serves three purposes.

One is it measures the net effectiveness and soundness of a business’s efforts.

Another is the ‘risk premium' that covers the costs of staying in business—replacement, obsolescence, market risk and uncertainty. . . ‘costs of being in business. . .’

Finally, profit ensures the supply of future capital for innovation and expansion, either directly, by providing the means of self-financing out of retained earnings, or indirectly, through providing sufficient inducement for new outside capital in the form in which it is best suited to the enterprise’s objectives.”

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“Profit serves three purposes.”

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