In your recent statements, you’ve been emphasizing the importance of companies focusing on ‘true profit’ rather than just growth. Could you elaborate on the key indicators that define ‘true profit’ and how businesses can effectively measure it?

In the long run, you need profit to survive. One can say that profit is the cost of survival. There is a lot of deception going on. EBITDA (earnings before interest, taxes, depreciation and amortization – Ed.) is not profit, EBIT (earnings before deducting interest and taxes – Ed.) is not profit. The only “true profit” is net profit after all costs, interests and taxes. Therefore I look at net profit when I evaluate a company. Of course, you have to accept differences across the life cycle of a company. For a start-up growth can be more important than profit, for a certain period of time.

You’ve predicted that inflation rates may stabilize around 5% annually over the next five years. What strategies should companies adopt to manage pricing and maintain profitability in such an inflationary environment?

Yes, I think that inflation will come back again. Wages are increasing in many sectors and companies must pass on these higher costs to their customers. Also, the experience of the 1970s should warn us. Here are the inflation rates from 1972 through 1981.