ABSTRACT
The profitability of socialist enterprises represents their ability to create net income for society. Under the new system of economic incentive, differences in profitability will serve as an important stimulus for enterprises to use credits and their own technical development fund to overcome the backwardness of their production base more rapidly. Very important measures for eliminating low profitability have also been outlined for enterprises that introduce articles involving new technology on their own initiative or under assignments set by the ministries. The rates of the allocations will conform to the normative amount within the limits of the plan for profitability worked out by the enterprise and confirmed by the ministry. Every excess in the use of production assets will reduce profitability, since the latter is expressed in the ratio of profits to assets, and thereby will lower the level of the material incentive for the collective.
