WHILE CONSIDERABLE RESEARCH has been done on developing complex, multisector models to project Gross National Product or aggregate sales, little work has been done on projecting corporate profits. The FRB-MIT model, for example, contains an identity that links corporate profits to its components, but no attempt is made to forecast aggregate corporate profits. The key to projecting corporate profits, assuming reasonably good projections of aggregate sales are available, is the profit margin applicable to these sales. This paper represents an investigation of the determinants of the aggregate profit margin. The importance of making accurate forecasts of aggregate corporate profits should be obvious. Future aggregate corporate profits are, of course, critically important to financial analysts who must make market judgments. They are also significant as a measure of the growth potential of the economy since, in combination with the retention rate, they determine aggregate business savings and hence the potential capital formation ability of the economy.