Some caution should be exercised when referencing profitability. The vast majority of the top 500 corporations are not-for-profit corporations so this report focuses largely on income. Profit or surplus cannot be taken as an accurate measure of the performance of a not-for-profit because the objective of such corporations is quite different. Their aim is not to generate profit or wealth but to use their resources to the maximum to further their not-for-profit purposes. The more income that a not-for-profit generates, the more resources it will devote to its not-for-profit purposes.
In this part of the report the terms ‘profit and loss’ include ‘surplus and deficit’ respectively for not-for-profit corporations.
Inclusion in the top 500 is based on income. Not all corporations in the top 500 make a profit.
Figure 13: Number of profit-making and loss-making corporations in the top 500, 2007–08 to 2014–15
In the past year the percentage of corporations reporting a profit increased with 60.2 per cent making a profit in 2014–15, up from 55.8 per cent in 2013–14 (figure 13). The increase in 2014–15 comes after four years of declining numbers of profit-making corporations.
Figure 14: Average profit for profit-making corporations and average loss for loss-making corporations in the top 500, 2007–08 to 2014–15
In 2014–15 the average loss for loss-making corporations and the average profit for profit-making corporations were greater than in any other previously reported years (figure 14).
Figure 15: Total combined profit and loss for the top 500 corporations, from 2007–08 to 2014–15
Figure 15 shows that the overall profitability of the top 500 corporations has fluctuated widely since 2007–08. This is a different pattern to the trend in overall income of the top 500 corporations, which has steadily increased over the same period (overall income is shown in figure 4).