Interest and Profit weirdness

General Discussions about new beta versions of Capitalism Lab
Dordanov
Level 2 user
Posts: 36
Joined: Sat Sep 15, 2012 11:39 pm

Interest and Profit weirdness

Post by Dordanov »

What I noticed in some recent game is that interest does not seem to get deducted from the profit amount in the bottom of the screen.

For example: let's say your company displays a profit of 5 mil in the bottom of the screen, but we you also have a loan resulting in an annual interest of 9 mil. You will notice your cash amount will decline over time, even though we should see it rise. This due to the fact the interest does not get calculated for the profit in the bottom of the screen. So you might think you are running a "healthy" company, even though you are heading for bankruptcy.

Is this an oversight, or is this intended because interest is considered a "special" typ of cost in some way?
Purifier
Level 4 user
Posts: 192
Joined: Sat Jun 23, 2012 12:56 am

Re: Interest and Profit weirdness

Post by Purifier »

is this intended because interest is considered a "special" typ of cost in some way?
Indeed :)

What you see at the bottom is your annual operating profit, not your netto profit.
You can see it more clearly in the corporation details windows at "Rankings" and "Income Statement"
In the rankings screen you can see:

Annual Revenue
Annual Operating profits
Annual Net Profits

Those 3 are only a prediction though (i think calculated on last years outcome).

Now go to Income Statement.

In the top part is your annual revenue calculated. As for the annual operting profit at the bottom of your screen is a prediction you wont find that number here, but look at the YTD (Year to date) row.

Operating revenue is the income of sales and rents (so direct income from your buildings). Deducted are the costs that those buildings made.
The outcome is your Operating profits.
After that the increase/decrease of your invested money (so stock investments, Dividends, asset values and interests) are added/deducted and the outcome is your actual profit, your Net(to) profit. Keep in mind that any purchasing you do with your money (buying/building new buildings, payoffs/payouts, stock exchanges) arent displayed as such in the income statement.

Below are 2 screenshots, the first from this years income statement, but since its only Februari i included (in the 2nd) last years statement aswell.

As you can see last year, the netto profit was no way near the operating profit. Thats mainly because i did some heavy investment in stock aquiring (hence why stock return is highly in the red, since the shareprice went down after those purchases). Also i have a big outstanding loan which, as you can see, cuts indeed pretty heavy in my profits.
This year i started repaying that loan and as you can see my stock investments are starting to pay off aswell.

The "other profit" section is a bit odd though, since the Stock return and Increase in Asset Value are investements and arent added/deducted to you cash directly. So since they are already presented in the Balance Sheet they shouldnt realy be in the Income statement. (What realy should be presented is the gain/loss of buying/selling stock and assets.)
David if you read this, can you (or ask someone from the Dev team) look into this ?

Hope this info helps :)
Attachments
netto profits 1.png
netto profits 1.png (849.18 KiB) Viewed 667 times
netto profits 2.png
netto profits 2.png (504.09 KiB) Viewed 667 times
Post Reply