This note presents revised and updated estimates of real profitability, and other information on the finance of companies. Particular attention is paid to the pre-tax and post-tax real rate of return on trading assets of industrial and commercial companies (excluding their North Sea activities) and to the pre-tax real rate of return to the equity interest in these companies. Latest estimates of the real cost of capital and the valuation ratio are presented. The previous analysis of trends in the income gearing, capital gearing and debt structure of industrial and commercial companies is extended to the published accounts of a sample of large, listed companies. Changes in the sources of companies' funds during the 1960s and 1970s are reported.
Profitability and company finance