You can return value to shareholders that doesn’t come out of profits. For example, selling off your assets doesn’t make you profit, but gives you cash on hand. If that money is returned to shareholders, you’ve changed your balance sheet, but haven’t made any profit. An even simpler example is just selling the company to someone else. The shareholders get whatever the agreed on price was to take it private.
> For example, selling off your assets doesn’t make you profit
if it's on the balance sheet and you sell it for more than it cost you, then you have to book it as non-operating income, i.e. capital gains, i.e. profit.
Ok, so you make X percent profit but the proceeds are more, and you distribute the proceeds to shareholders. You can also sell at a loss and still make distributions to shareholders. This is Private Equity 101.
