Supporting Reading:

Luca Pacioli on Business Profits by Michael J. Fischer

Question 1 40 pts Profit is a key measure of firm performance. Recently investors in the capital markets depend on firm's EPS figures to evaluate firm's profitability. In the article of "Pacioli", he suggested that profit should be pursued in honest and lawful ways. In addition, he discussed about "reasonable profit". Although he did not define it, we discussed a definition of "reasonable profit" based on firm's mission or goals. What is the implied meaning of "reasonable profit" we discussed? Do you think whether the financial statement can show the reasonableness of profit? If yes, how? If no, why not? Question 1 40 pts Profit is a key measure of firm performance. Recently investors in the capital markets depend on firm's EPS figures to evaluate firm's profitability. In the article of "Pacioli", he suggested that profit should be pursued in honest and lawful ways. In addition, he discussed about "reasonable profit". Although he did not define it, we discussed a definition of "reasonable profit" based on firm's mission or goals. What is the implied meaning of "reasonable profit" we discussed? Do you think whether the financial statement can show the reasonableness of profit? If yes, how? If no, why not