{"id":25660,"date":"2015-02-23T07:30:16","date_gmt":"2015-02-23T07:30:16","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=25660"},"modified":"2024-04-03T13:15:46","modified_gmt":"2024-04-03T07:45:46","slug":"the-stability-principle","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/","title":{"rendered":"The Stability Principle"},"content":{"rendered":"<p style=\"text-align: center\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-25708\" alt=\"The Stability Principle\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg\" width=\"225\" height=\"225\" srcset=\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg 225w, https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle-150x150.jpg 150w, https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle-55x55.jpg 55w\" sizes=\"auto, (max-width: 225px) 100vw, 225px\" \/><\/a><\/p>\n<p>What does The Stability Principle state?<\/p>\n<p>This principle holds that a company\u2019s earnings are much more stable than we<br \/>\nwould expect. Net income is frequently a modest amount that remains when<br \/>\ncharges are offset against revenues. Net income represents an equilibrium that is<br \/>\nnot necessarily upset by external factors. Let\u2019s consider, for instance, a supermarket<br \/>\nchain, whose net income is roughly equal to its net financial income. It would be a<br \/>\nmistake to say that if interest rates decline the company\u2019s earnings will be wiped<br \/>\nout. The key issue here is whether the company will be able to slightly raise its<br \/>\nprices to offset the impact of lower interest rates, without eroding its competitive-<br \/>\nness. It probably will be able to do so if all its rivals are in the same boat. But the<br \/>\ncompany may be doomed to fail if more efficient distribution channels exist.<br \/>\nThe situation is very similar for champagne houses. A poor harvest drives up<br \/>\nthe cost of grapes and pushes up the selling price of champagne bottles. Here the<br \/>\nkey issue is when prices should be increased in view of the competition from<br \/>\nsparkling wines, the likely emergence of an alternative product at some point in<br \/>\nthe future and consumers\u2019 ability to make do without champagne, if it is too<br \/>\nexpensive.<br \/>\nIt is important not to repeat the common mistake of establishing a direct link<br \/>\nbetween two parameters and explaining one by trends in the other.<\/p>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What does The Stability Principle state? This principle holds that a company\u2019s earnings are much more stable than we would expect. Net income is frequently a modest amount that remains when charges are offset against revenues. Net income represents an equilibrium that is not necessarily upset by external factors. Let\u2019s consider, for instance, a supermarket&#8230;<\/p>\n","protected":false},"author":600,"featured_media":25708,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[1498,2272,2271,2273],"class_list":["post-25660","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-competition","tag-future","tag-principle","tag-stability"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Stability Principle<\/title>\n<meta name=\"description\" content=\"What does The Stability Principle state?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Stability Principle\" \/>\n<meta property=\"og:description\" content=\"What does The Stability Principle state?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/\" \/>\n<meta property=\"og:site_name\" content=\"Vskills Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/\" \/>\n<meta property=\"article:published_time\" content=\"2015-02-23T07:30:16+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-03T07:45:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"225\" \/>\n\t<meta property=\"og:image:height\" content=\"225\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Deepak Narang\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Deepak Narang\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/\",\"name\":\"The Stability Principle\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg\",\"datePublished\":\"2015-02-23T07:30:16+00:00\",\"dateModified\":\"2024-04-03T07:45:46+00:00\",\"author\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/cf6a3dd957876fba2f816c1007142095\"},\"description\":\"What does The Stability Principle state?\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/#primaryimage\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/The-Stability-Principle.jpg\",\"width\":225,\"height\":225},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/the-stability-principle\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Stability Principle\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/\",\"name\":\"Vskills Blog\",\"description\":\"Vskills - 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