Essay: The Impact of Profitability

Sample Essay Impact of Profitability

Profitability is usually the essence of any company thus; the impact of profitability is of paramount importance to the existence of Wal-Mart. However, it is affected by the fixed and variable costs in the company.

The fixed costs include costs that are constant over a period of time e.g. rent, while the variable costs include costs that change over time e.g. wages (Mendelievich p. 37). A higher profitability results in high dividends for the stockholders of the company and vice versa.

The problems with private property rights such as copyrights and patents would rarely occur because Wal-Mart is a recognized brand that deals mainly with retail products and as such possesses the rights to buy and sell products within the price reach of consumers.

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