Given that I am a macro investor I look at cues to explain aggregate profits of all firms of the market. Individual firm’s profit is a produce of how well it runs its operations and how it is able to out-compete others in creating good products at low cost with good sales and distribution strategies. Assessing all these parameters is the job of my

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Investments & inventory: When a firm buys INR 300 machine, it’s basically an inflow (or income) for another firm which sells it. But for the buying firm, it’s not a cost. It’s an investment. It becomes a cost very slowly as machine depreciates. So for the two firms together, decision of a firm to buy a machine from another firm becomes profit.

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