THE ROLE OF PAPER PROFITS IN INDUSTRY.

The article discusses the significance of corporate "paper profits." This refers to corporate profits which have not been converted to cash and only exist on paper. The term mainly pertains to investors and speculators when referring to profits they would realize if they sold their securities at the market price. In a fluctuating business cycle analysts say it is particularly important to calculate paper profits correctly. They recommend that all businesses have a paper profit reserve for potential inventory increases.