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2021 | Book

True Profit!

No Company Ever Went Broke Turning a Profit

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About this book

Real profit after taxes is the most important management target. Profits are the cost of survival and the creators of new value. In this book, celebrated management thinker Hermann Simon brings clarity to the jungle of profit concepts and balance sheets. He sheds light on the performance of numerous companies and industries in international comparison and looks at the key profit drivers: price, sales and costs. Hermann Simon derives practical consequences from his astute analysis and offers a convincing guide to profit-oriented and sustainable corporate management!

The book pleads for a reconsideration of profit as the guiding concept of management and entrepreneurship, and it showcases how profitability can ensure the long term health of a business. Questioning the fact/dilemma, why more than 80 percent of companies in the US are going public have never turned a profit, this book is invaluable inspiration and a powerful guide for responsible and resilient managers and entrepreneurs.

Table of Contents

Frontmatter
Chapter 1. Profit: What is It?
Abstract
If you want to infuriate large portions of society and turn people against you, uttering that sentence is a very effective way to do it.
Hermann Simon
Chapter 2. In Search of Profit
Abstract
Marcel Proust became famous thanks to his monumental work In Search of Lost Time. In this chapter we set out in search of profits.
Hermann Simon
Chapter 3. The Goal
Abstract
In this chapter we will deal with the economic aspects of earning profits and of profit orientation. We will explore the ethical questions surrounding profit in Chap. 4.
Hermann Simon
Chapter 4. The Ethics of Profit
Abstract
One could also title this chapter “Profit and the Market Economy.” I will get less into general questions of ethics, morals, or philosophy, and concentrate instead on economic aspects related to profit.
Hermann Simon
Chapter 5. Diagnosis and Therapy
Abstract
In the previous chapters we strongly affirmed the idea of profit orientation, both from a purely economic perspective as well as an ethical one. At the same time, an analysis of the world’s current profit situation revealed that a considerable portion of companies earn only modest profits. Many do not generate an economic profit, which means that they do not recover their costs of capital.
Hermann Simon
Chapter 6. Profit Driver: Price
Abstract
There are only three profit drivers: price, sales volume, and costs. Revenue is the product of price and sales volume.
Hermann Simon
Chapter 7. Profit Driver: Sales Volume
Abstract
Management of sales volume—one of the three profit drivers—is about steering the volume in such a way that profit is maximized, or at least improved relative to a starting situation. Another goal can be to minimize the effects of a potential profit downturn. Higher volumes only make sense when they drive higher profits. When a volume decline brings about an increase in profit, the company should accept that decline.
Hermann Simon
Chapter 8. Profit Driver: Cost
Abstract
Price and volume, the profit drivers that we discussed in detail in the previous two chapters, affect revenue, i.e. the top line.
Hermann Simon
Backmatter
Metadata
Title
True Profit!
Author
Hermann Simon
Copyright Year
2021
Electronic ISBN
978-3-030-76702-0
Print ISBN
978-3-030-76701-3
DOI
https://doi.org/10.1007/978-3-030-76702-0

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