Profit rate is the ratio of surplus value to all prepaid capital, and it is also the transformation form of surplus value rate. P' stands for profit rate, C stands for all prepaid capital, and the profit rate is P' = m/c = m/(c+v).

Profit rate reflects the relative index of enterprise's profit level in a certain period. Profit rate index can not only assess the completion of enterprise profit plan, but also compare the management level between enterprises and in different periods, thus improving economic benefits.

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In capitalist society, it refers to the ratio of surplus value to total prepaid capital, which is the transformation form of surplus value rate, indicating that capital appreciation is the degree of capitalist profit.

Formula capitalists produce goods for the purpose of making money. He invested a certain amount of value in the turnover and gained more value. This increment is brought by variable capital, that is, the surplus value created by unpaid labor of hired workers.

However, for capitalists, all components of prepaid capital are equally important for the production of surplus value. No matter where the surplus value comes from, it is always higher than the balance of cost price, and therefore higher than the balance of all prepaid total capital.