# The global firm’s profit We have the two equations : R' = C' + I' flow (1) 100 = 60 + 40 R' = C + S m reflux (2) 100 = 80 + 20 So the global firm’s profit.

## Presentation on theme: "The global firm’s profit We have the two equations : R' = C' + I' flow (1) 100 = 60 + 40 R' = C + S m reflux (2) 100 = 80 + 20 So the global firm’s profit."— Presentation transcript:

The global firm’s profit We have the two equations : R' = C' + I' flow (1) 100 = 60 + 40 R' = C + S m reflux (2) 100 = 80 + 20 So the global firm’s profit :  = C – C' = I' - S m = 20 (3) et (4)

The global firm’s accounts

Desagregation of global firm in two sectors households E1E1 I’ 2 =30 E2E2 I’ 1 = 10 I 1 = 20 I' = 40 C' = 60 C = 80

E 2 accounts E 1 accounts

Accounts in income-value of the two sectors E 2 accounts do not change, since its investment does not come from a purchase and was already counted in income- value. E 2 accounts :

Input-output table in prices ironcorn ironqipiqipi piIpiI ii cornqcpcqcpc pcCpcC cc va i va c ii cc

Input-output table in income-value ironcorn ironqiviqivi viIviI ’i’i cornqcvcqcvc vcCvcC ’c’c wiwi wcwc ’i’i ’c’c

q c v c + w i = (q i + I)v i q i v i + w c = (q c + C)v c

C H AB 15 30 I B =10 C B =30 R’ B =30 R’ C =20 R’ A =20 C A =30 I A =10 I C =20 5

Input-output table

Input-output table in prices Intermediate consumption Cons.I SS  ABC A30 60 B1530550 C40 VA45204060405 605040150

15k b +20= 60k a 30k a + 30 = 50k b 20 = 40k c k c = 0,5 k a = 0,5686 k b = 0,9412

Input-output table in income-value Intermediate consumption Cons.I SS  ABC A17.06 34.12 B14.1228.244.7147.07 C20 R’20302045..30204.71 34.1247.0620101.19

Accounting in prices Firm A Firm B

Firm C Total profit = profit A + profit B + profit C 35 = 25 + (-10) + 20 Total cash = cash A + cash B + cash C -10 = 15 + (-25) + 0

Accounting in income-value Firm A Firm B

Firm C Total profit = profit A + profit B + profit C 14.71 = 20 + (-15.29) + 10 Total cash = cash A + cash B + cash C -20 = 5 + (-25) + 0

R’ = C’ + I’ +  S’ 70 = 45.30 + 20 + 4.71 R’ = C + S H 70 = 60 + 10  ’ = C – C’ = 60 – 45.30 = 14.70  ’ = I’ +  S’ – S H = 24.71 – 10 = 14.71

Grouping A + B Accounting accounts Accounting in income value income statement expensesrevenues monetary income transfer of value profit 50 10 4.71  stocks sales 4.71 60 total64.71total64.71

The Formation of Profit

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