Cintas: Economic Profit Is Underappreciated, Not As Pricey As It Appears
Cintas(CTAS) Seeking Alpha·2024-06-14 01:06
kali9/E+ via Getty Images One limitation of the accounting profit that is presented in an income statement is that it does not reflect the opportunity cost of the profit. For debt, the income statement reflects interest expense, which is the cost of securing debt financing for the business. There is no such item on the income statement to reflect equity financing. Instead, it is assumed that whatever is left over after paying expenses is sufficient to compensate equity investors for providing capital to the ...