Windfall Profits
Definition of 'Windfall Profits'Huge profits that occur unexpectedly due to fortuitous circumstances. Such profits are generally well above historical norms and may occur due to several factors - such as a price spike or supply shortage - that are either temporary in nature or may be longer lasting. Windfall profits are generally reaped by an entire industry sector, but can also be reaped by an individual company. |
|
Investopedia explains 'Windfall Profits'In recent years, surging prices for crude oil have led to record profits for many energy companies, leading to demands from politicians to deem them as windfall profits and tax them accordingly. Needless to say, most companies that have made windfall profits strongly resist attempts to pay additional taxes on them. Arguments made by such companies are that record profits lead to record taxes payable by them in any case, as well as the fact that windfall profits are likely to be only temporary in nature. |
Related Definitions
Articles Of Interest
-
Winning The Jackpot: Dream Or Financial Nightmare?
Don't assume all prizes are free. Many come with enough costs to render them worthless. -
Why You Can't Influence Gas Prices
Don't believe the water-cooler talk. Big oil companies aren't to blame for high prices. -
For Companies, Staying Private A Matter Of Choice
Find out what firms have to gain by eschewing the windfall from a flashy IPO. -
Whisper Numbers: Should You Listen?
These unofficial forecasts hold the potential for insider insight - and investment risk. -
Type Of Return
A client asks an IA to calculate what rate of return must be earned to grow $10,000 to $25,000 in five years. The rate of return the IA must calculate is called: a. Future returnb. Internal ... -
Financial Physics: "Natural" Market Laws
Physics uses math to define the laws of the universe; here, we look at what laws explain the financial universe. -
Financial "News": When Opinion Becomes Fact
News agencies and financial journalists aren't actually analysts, so don't believe everything you read.
Free Annual Reports