Profitability in companies. i dont get it. pls explain.

Hello People

When the inflation is between 10-15%(unofficially...dont ask where I pulled this figure out but I've read this somewhere online atleast a couple of times recently ) why do businessmen do business when the net profit margin is below 15%? I'm not accounting champ or from the commerce background but am just a regular guy doing business. My personal view is that it does make sense to do business if you dont make atleast 5% inflation adjusted returns.

Am I thinking right?

Thanks

Raj

Replies (2)

am not sure... but the inflation rate may be overall.. not industry speicific..

Originally posted by : *Sree*

am not sure... but the inflation rate may be overall.. not industry speicific..

Lets assume its overall. It just doesn't make sense does it to do business at a net profit % less than the inflation?

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