Real Profit vs. Accounting Profit: A Human Capital Depletion Framework for Business Valuation
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| Format: | Recurso digital |
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2025
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| _version_ | 1866901851903885312 |
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| author | Mahardhika, Jimmy Yuanda |
| author_facet | Mahardhika, Jimmy Yuanda |
| contents | <div> <div> <div> <p>Traditional accounting profit ignores the depletion of human assets in the production process. This paper introduces the Real Profit Framework that incorporates the Human Capital Depletion Rate (HCDR) as a quantitative parameter in assessing a company’s real profitability. When HCDR > 1, the company consumes human capacity faster than its regeneration—creating unsustainable illusory profit. This framework provides quanti- tative metrics for investors, founders, and managers to assess real profitability and business sustainability. Mathematical models and case studies demonstrate that many high-growth companies actually operate in the depletion zone, with real profits far below accounting profits. This is not an ethical theory or CSR, but rather an accounting correction that reflects the economic reality of business.</p> </div> </div> </div> |
| format | Recurso digital |
| id | zenodo_https___doi_org_10_5281_zenodo_17621142 |
| institution | Zenodo |
| language | |
| publishDate | 2025 |
| publisher | Zenodo |
| record_format | zenodo |
| spellingShingle | Real Profit vs. Accounting Profit: A Human Capital Depletion Framework for Business Valuation Mahardhika, Jimmy Yuanda Accounting Accounting/economics Human Capital Depletion Business Valuation Accounting Framework <div> <div> <div> <p>Traditional accounting profit ignores the depletion of human assets in the production process. This paper introduces the Real Profit Framework that incorporates the Human Capital Depletion Rate (HCDR) as a quantitative parameter in assessing a company’s real profitability. When HCDR > 1, the company consumes human capacity faster than its regeneration—creating unsustainable illusory profit. This framework provides quanti- tative metrics for investors, founders, and managers to assess real profitability and business sustainability. Mathematical models and case studies demonstrate that many high-growth companies actually operate in the depletion zone, with real profits far below accounting profits. This is not an ethical theory or CSR, but rather an accounting correction that reflects the economic reality of business.</p> </div> </div> </div> |
| title | Real Profit vs. Accounting Profit: A Human Capital Depletion Framework for Business Valuation |
| topic | Accounting Accounting/economics Human Capital Depletion Business Valuation Accounting Framework |
| url | https://doi.org/10.5281/zenodo.17621142 |