In [[Management Control]]@mbi there are two different concepts for profit:
* [[The economic concept of profit]]
* [[The accounting concept of profit]]

|The economic concept of profit|The accounting concept of profit|h
|Cash Based|Accrual based|
|Future Oriented|Hindsight oriented|
|Decision Support|Reporting to the outside world|
|Time Value ([[WACC]])|Only interest taken into account (not full cost of capital)|
|Multi period|One period|

The cost of capital is //severely// underestimated in the accounting concept of profit.
bag
finance_public
created
Sat, 08 Oct 2011 07:32:40 GMT
creator
dirkjan
modified
Sat, 08 Oct 2011 07:32:40 GMT
modifier
dirkjan
tags
M18
Term
creator
dirkjan