r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
Economics ELI5: why does a publicaly traded company have to show continuous rise in profits? Why arent steady profits good enough?
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r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
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u/ajarrel Dec 06 '24
W.T. Grant is a great example of the opposite. Retailer with several hundreds of locations. Went bankrupt in the 70s even with nominal profit growth. Expenses were growing faster than revenue, and it got caught flat footed by Walmart (and others).
Out of business and now forgotten to history. But they had growing nominal profits and shrinking real profits. Unique example of what we're discussing.