What is economic profitability? Reflections ...

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Christophe
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What is economic profitability? Reflections ...




by Christophe » 01/03/08, 07:06

Economic profitability what is it for you?

Behind this rather "basic" question I would like to launch a subject for reflection on the economic profitability of a purchase in general.

I would be laconic and leave on the current paradox of our society:

consumer lambda wrote:I do not invest in solar because it's not profitable on the other hand I do not even ask myself not the question of profitability when buying a new car


It would be high time to think about changing our scale of "classification" of social values... even to reverse it ...
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by Remundo » 01/03/08, 09:55

Ah, very vast subject ...

In my opinion, the profitability, if we wanted to summarize could be reduced to an activity where everyone finds his account:
- the industrialist
- the consumer
- the state, and therefore the social systems
- workers, technicians, industrial executives
- AND the environment.

Profitability ... would it be econology :?:

Is it utopian? Maybe, maybe not !
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by Christophe » 01/03/08, 10:08

Vast debate as you say ...

We should already begin by defining precisely and as generally as possible the concept of profitability.

It's not just economic profitability, I suppose ...

Example can we say: "I quit smoking, is it profitable for my (capital) lung?"
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by louphil » 01/03/08, 13:52

From the moment the word profitability refers to a monetary system, the result is definitely biased ...
The currency was initially a tool of exchange, but so many good things considered as a good in its own right, that it lost its main characteristic, namely to serve as a standard measure to estimate a value, that this either working time, or goods ...
So in the current state of things, the word "profitability" does not mean anything ...
On the other hand, if we take the point of view of a worker, who will build a tool to accomplish repetitive tasks more quickly than with his previous means, the word profitability will take on its full meaning as soon as his new tool allowed him to make up for the time "lost" in making it ...
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by Arthur_64 » 01/03/08, 14:12

If I buy an object - let's say a car - that lasts a very long time, that does not need a lot of maintenance, that consumes little fuel, ... it's profitable for me.

This vehicle, I keep it a long time so I do not renew it and it does not need a lot of maintenance: it is not profitable for the manufacturer.

Although profitability is in theory the ratio between what it costs and what it relates (for the manufacturer). So if he does not sell it at a loss it's profitable for him, but it's not his interest.

It's all about repository. What is interesting for the consumer is not necessarily for the seller.

The ideal (the utopian?) Would be interesting purchases for the consumer & the seller / producer.

We have to see all the parameters, we are in a cybernetic system.
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by Other » 01/03/08, 17:52

Hello
We have a number of examples in the past life
For heating homes
I read and I listen to you, you have a tendency for questions of lifestyle or aesthetics, to build stone houses very little insulated, to have hearths is beautiful to look at, but it is far from being effective, circulating water heating systems, it is silent, it's clean, it's discreet, but energetically?
If I compare the number of liters of heating oil to heat your homes in a mild climate, compared our homes, in a harsh climate with 5 winter months (-23 again these last days and the snow will only melt in early April)
What is the differrence, the insulation, the construction of houses, the mode of heating, the burning of wood is more rational in a good furnace with slow combustion, than in a chimney.

The economic profitability in a family is that once all his daily expenses, accommodation food, ect. he has a little something left to keep busy.
Some activities can be done with pleasure such as going to cut wood with a sciote and an ax, but it goes much better with a chain saw, even to cut his lawn, or return the land of his large garden ..
Before I cut the iron with a hand saw, now I rarely use this tool.
A man in aging becomes more automatic (profitable) in his gestures, he saves his muscular energy, when he goes to look for a tool, he thinks not to take unnecessary steps, he plans his activities not to do useless action.
When I was young I wondered how to do this?
Now I wonder why I have to do this? do I really need it?

Andre
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by nightrow » 01/03/08, 17:52

My point of view :
An operation is said to be "profitable" when the gains are greater than the costs. This is the basic definition, used by manufacturers to define whether a product is profitable, or in other words profitable.

For an individual, the notion of profitable has another meaning: in general, it is the fact that the chosen operation (purchase of a car) generates less expenditure (compared to a reference value).
For example, an investment is often said to be profitable when it exceeds the reference that is for example booklet A.

It should be noted that in the context of the purchase of a car, the fact of having to buy the car is acquired. The gain (mobility) is considered necessary, the question of investment no longer arises.
Therefore, only the question of "profitability" arises, namely which purchase will minimize the expenses compared to a typical car.
This question is often not asked because the gain (mobility) amply justifies the investment.

As part of buying solar panels, the only thing that can push the investment is pure financial profitability. The gain (autonomy and renewable energy production) is very rarely preconceived as a sufficient reason to justify a solar panel project.
The project is therefore for him only the financial profitability.

So the whole problem revolves around what value is associated with the gains and the costs. As long as the safeguarding of the planet will not be seen as an objective alone justifying investments (we will come to it perhaps), the only gain estimated for the majority will be counted only in € ....

In short I probably do not teach you much but it's always interesting to formalize this kind of concepts :D
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by freddau » 01/03/08, 19:23

I think that the notion of profitability is not too far removed from the notion of value of a thing and one falls into a philosophical debate.

I explain myself that it is profitable, it is necessary that the thing has a value.
If a thing has no "utility", well it has no value for us and then there is profitability, go sweetie, we delocalize.

But if something is important to us then there will be a lot of value and profitability will be important and the financiers will be happy?

No??
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by Flytox » 01/03/08, 19:49

Hello Nightrow

nightrow wrote:So the whole problem revolves around what value is associated with the gains and the costs. As long as the safeguarding of the planet will not be seen as an objective alone justifying investments (we will come to it perhaps), the only gain estimated for the majority will be counted only in € ....


Exactly, what is profitable is to have the notion of what is essential. If we bust the planet by negligence, ignorance, lure of profit, stupidity etc ... we will have lost everything there is more calculation of profitability to do. It's a bit like chess, there's no point in taking the opposing lady if it means undergoing 2 shots later on a checkmate. :frown:
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by nightrow » 01/03/08, 20:05

It is for this reason that only financial profitability is a long-term notion of failure.
By what notion to replace it, is the problem ...
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