Distributed profit represents the earning source of the business owner (Saxena 2009). The section of the earnings not distributed as interests, taxes or wages remains within the organization to fund the available investment opportunities. Maximizing profit tend to be the core objective of any business entity. Indeed, it is not an easy task for the firm's leadership to establish the correct decisions that can help maximize earnings (Szwarc 2005). For example, short-term profits can be pumped up simply by avoiding: discretionary costs, maintenance expenses, investment. However, these operations cannot be avoided forever because the firm might run into financial crises in future. Moreover, what arguments the overall gain is not necessary equivalent to what permits the firm to attain maximum profitability. In actual sense, companies do set profit targets, and often pay top management to attain the set targets but the strategic goals of a company are broader than the desired profits (Martin 2001). Proceeding with other factors that determine profitability, escalating prices of other market stakeholders, better sales skills and conditions, superior overall price levels allow for better price level of the given product (Chakraborty, Zhiyi&Sanjeev; 2009). Thus, firms may be compelled to enhance nominal gains to the point that costs become inelastic; that is, they increase less than proportionally to earnings. Cost structure as well as its elasticity to production degree is hence relevant to gains. When sales expand, economies of scale demand that profits should increase accordingly (Szwarc2005).Contrariwise, a recession with declining sales tends to hit earnings particularly hard in sectors where there are exorbitant fixed costs and economies of scale. Rising wage levels directly reduce profitability of a firm. If, nevertheless, on a macro-economic scale, these expenses would be incurred on in internal expenditure, higher consumption would enhance organization's earnings, partially offsetting the previous dynamics.
