This article presents updated and revised estimates of company profitability derived from the published accounts of large companies. These statistics complement and supplement the estimates of company profitability based on the national accounts.
The article concludes that overall company profitability continued to improve in 1984; individual industrial sectors, however, display widely differing performances and trends. The improvement in real profitability based on current cost accounts is much more marked than the improvement in nominal profitability based on historical cost accounts. The number of companies reporting current cost information, however, is diminishing, and this is reducing the reliability of the current cost series. The article also finds that, since 1980, the current cost return on trading assets has generally been lower than the current cost return on total capital employed. The series based on historical costs shows the opposite result, but it is suggested that this may simply reflect the weaknesses inherent in historical cost accounting.