Profit rate is the ratio of surplus value to all prepaid capital, and profit rate is the transformation form of surplus value rate, which is another ratio calculated by different methods for the same surplus value.
Profit rate is a relative index reflecting the profit level of an enterprise 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 to improve economic benefits.
Introduction of profit rate:
When surplus value is converted into profit, surplus value rate is converted into profit rate. Profit margin is the ratio of surplus value to all prepaid capital. Profit rate and surplus value rate are different ratios obtained by comparing the same surplus value with different amounts of capital. The profit rate indicates the proliferation degree of all prepaid capital, which is always less than the surplus value rate in quantity, thus covering up the exploitation degree of capitalism.
Under the capitalist system, the profit rate tends to decrease. This is because, with the development of capitalist industries, the organic composition of capital is constantly improving, which will inevitably lead to a decline in profit margins.