267-281

• Rousopoulos, Vasilios, A.

Calculating profit and price policy under conditions of inflation and of monetary stability is discussed in this work, the correct calculation of profits being the principal issue. Is profit the difference between either the sale price and the purchase price (price level adjusted for periods of inflation) or the sale price and the replacement cost? The author argues that the first method of profit calculation is the correct one because a fixed capital of a particular value and not assets in quantities will be enterprise’s starting point, as the theory of replacement price has suggested. Nevertheless, the theory of the replacement price is the proper one in terms of price policy because the sale price can be shaped on the basis of the current replacement price and not of the historic purchase price. The replacement cost should also be taken into consideration by the distribution of profit because the higher the rise in the replacement cost price in comparison with the purchase cost price is, the less, on the other hand, the quantity of merchandise that can be acquired by the starting financing capital will be.

• Economics and Business

• Economics

Inflation accounting, Profits’ calculation, Price level-readjustment, Maintaining integrity, Historic price, Replacement price, Pricing policy, Profits distribution

JEL classification: M49 Accounting other