As prices change, businesses that value inventory withdrawals at acquisition cost may realize profits or losses. The IVA is needed because inventories as reported by business are often charged to cost of sales (that is, withdrawn) at their acquisition (historical) cost rather than at their replacement cost (the concept underlying the NIPAs). Inventory valuation adjustment (IVA) is the difference between the cost of inventory withdrawals valued at acquisition cost and the cost of inventory withdrawals valued at replacement cost. Their reasoning for inventory valuation is this: Quarterly tax receipts for Q2 increased 2.6% from Q1 to $418.7 billion yet have decreased -2.6% from a year ago.įrom the BEA's magic secret decoder ring guide to National Income and Product Accounts (large pdf), national income also uses inventory valuation and capital consumption adjustments. These are the corporate funds available for investment according to the BEA. Net cash flow, with inventory evaluation adjustment decreased -8.6% from Q1 to $2,064.0 billion. These are profits from current production. Below are some of the other ways of viewing corporate profits, but anyway ya slice it, corporations are simply getting more of the American pie while workers go without.Ĭorporate profits with inventory valuation and capital consumption adjustments, after tax, increased 4.2% from last quarter to $1,680.2 billion and are up 7.1% from one year ago.Ĭorporate profits with inventory valuation and capital consumption adjustments, pre-tax, increased 3.9% from Q1 to $1,989.2 billion,and have increased 8.7% from a year ago. The BEA reports corporate profits in a variety of ways and it seems whatever one's focus and political predilections are implies which number they use. Nope, corporations are making out like bandits because they are squeezing workers and also cashing in on very low interest rates. That's not due to increased prices and because this is profits per unit, it's not an incredible in sales volume. This is just terrible for America and American workers.Ĭorporate profits per unit also set a record. To illustrate how bad this is, the below graph shows wages and salaries as a percentage of GDP in red, scale on the right, against corporate profits as a percentage of GDP, in blue, scale on the left. Workers are clearly getting less and less of the American economic pie, while corporate profits continue to soar.

Corporate profits as a percentage of GDP are at an all time high and after tax profit margins per unit are also soaring to the stratosphere.Ĭorporate profits after tax just hit a record high as a percentage of GDP, while wages are at their lows as a percentage of nominal gross domestic product. Corporate profits after tax are also up 5.8% from a year ago. Corporate profits after tax increased 2.6% from Q1 2014 to $1,830.4 billion. The BEA released corporate profits for Q2 2013 along with GDP.

The profit any way you slice it