The term “profit” is a vague term. This is because there will be a different impression about the benefits of different mindsets. Since profits can be net profit, gross profit, before tax profit, profit per share or rate of return, etc., there is no rule to maximize clear profit on profit.
Ignores Time Value of Money
The more profitable formula suggests that “the higher the profit, the better.” In short, it is considering naked profits without considering their time. “One dollar today is not equal to one dollar a year later,” says another key finance strategist. Therefore, the value of time is completely ignored. Alternatively, we can say that it ignores the temporal pattern of cash flow.