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The Cycle In Profits
The process that determines a company's profits is complex and multivariate. The economic cycle profoundly affects some companies' sales but less on others. Primarily because of differences in operating and financial leverage, a given percentage change in sales has a much more significant impact on profits for some companies than others.
The linkage between economic growth and profit growth is highly imperfect because the movements of the economic cycle aren't the only thing that influences sales and also because a change in sales doesn't necessarily result in an equivalent change in profits.
Jeremy Silva
Jeremy Silva lives near San Francisco with his wife and son. He is a writer, blogger, and personal investor. He is passionate about education, personal development, project management, and investing. His blog has over 100 book summaries on many topics including investing, self-help, and business. You can click on the link to read some interesting book summaries on Jeremy’s website (https://jsilva.blog/book-summaries/).