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Profits

Volume 938: debated on Thursday 10 November 1977

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asked the Secretary of State for Industry (1) if he will publish a table showing pre-tax company sector trading profits as a percentage of net capital stock in 1950, 1960, 1970 and each year thereafter;(2) if he will publish a table showing pre-tax company sector trading profits as a percentage of national income in 1950, 1960, 1970 and each year thereafter.

Figures for the company sector, derived from the national accounts are shown in the following table—

Per cent
All companies' pre-tax trading profits* as a percentage ofIndustrial and commercial companies' pre-tax trading pre-tax trading profits* as a percentage of
Net Net capital stockt†National incomeNet capital stock‡National income
(1)(2)(3)(4)
195012·212·4n.a.n.a.
196012·213·613·214·6
19706·98·28·39·6
19717·28·68·59·9
19726·98·28·59·8
19735·86·97·48·6
19742·32·64·35·2
19751·41·33·23·8
19761·51·63·34·2
Notes:

* After deducting stock appreciation and capital consumption (depreciation) at current replacement cost.

† Net capital stock of fixed assets at current replacement cost plus the book value of stocks, for all companies.

‡Net capital stock of fixed assets at current replacement cost plus the book value of stocks, for industrial and commercial companies. n.a. — Not available.

Separate figures for the industrial and commercial companies sector are also given as these provide a better measure of British industry's profitability and contribution to national income than the figures for all companies. The latter include financial companies and institutions whose pre-tax trading profits, under national accounts conventions, are the differences between their charges and commissions, and management expenses which are negative. Interest receipts and payments are regarded as transfers and not as receipts and payments for a financial service.