Treasury going down?
[startclear] [postad]Everyone playing Tropico 5 will recognize this situation. At some point you are doing fine and you are making a decent profit. Then for some unknown reason your Treasury starts to decline. You check all your industries and everything is making a profit. So why is your treasury losing money??
[stopclear]Tropico 5 profit is actually a Virtual Profit
Mathematically the profit calculation displayed in-game is accurate. Unfortunately it has same flaws from a business perspective. It can best be described as as a virtual profit. I will explain why.
Profit formula
Every building in Tropico 5 lists its Monthly profit. These profits are calculated by the following formula’s
Revenue = Monthly Production x Export price
Profit = Revenue – Budget – Input cost
Issue with profit formula
This all makes sense. However the trick is that the export price and input cost are BOTH 100% based on the value listed in the Alamanc (Almanac>Economy>Resource overview). This has some implcations.
- Your profits are not influenced by your trade agreements. Meaning expensive import contracts will not change the profit listed. Advantageous export deals also have zero effect.
- Supplying your own inputs (vertical integration) does NOT affect profits at all. At least not according to Tropico 5’s profit figures.
- Because you already payed the cost, your treasury will be boosted by the full revenue when a ship docks. Not by the profit!
- You will not see any treasury gains if you do not export.
Danger of virtual profit
The biggest issue with Virtual profits is that there is a huge disconnect between what the game tells you is happening, and what is actually happening to your treasury.
Scenario 1: 10 cotton plantations
Let’s imagine you really like Cotton. So you have constructed 10 cotton plantation employing 80 happy Tropicans. These Cotton plantations generate a profit. And Indeed, AFTER the products are moved to your dock, and AFTER a trade ship has docked you will see your treasury increasing. The promised profit flows into your treasury after this list is complete:
- Cotton moved to docks by teamster
- Trade ship has docked
Scenario 2: Build a single Textile factory
Now that you made a lot of Tropican dollars you construct a single Textile Factory. Unfortunately the factory is not working, because you have no High SChool educated tropicans.
Tropico now stockpiles all your Cotton inside the factory, it does not really care the factory is not working. The game will tell you everything is fine. After all you have 10 profitable plantation right? Let’s look at the revenue requirements:
- Cotton moved to factory by teamsters
- Factory processed ALL cotton into clothing
- Clothing moved to docks by teamsters
- Trade ship has docked
Now remember that your factory is not working. Even if it was, it cannot handle the output of 10 Cotton plantations. So there is NO revenue coming from Cotton. Instead your are stockpiling cotton (up to 8000!).
You will have to pay those 80 employees, but you have no income! Each month your treasury will take a big hit. You have basically destroyed your economy by creating an imbalance.
I have actually seen 8 logging camps with halted production because each of them had stored 3000 logs and the Lumber Mill could not keep up.
Lessons learned:
Tropico 4 used to have “real” profit. Meaning it was adjusted for import and export prices. There are advantages and disadvantages to a virtual profit. Let’s make the best of it:
- Always have enough teamsters. You will not see a penny of the promised cash until it is actually exported!
- Balance your factories with raw materials. Do not use 1 Lumber mill for 4 logging camps. You will LOSE money!
- Import deals will negatively impact your profits even if it doesn’t show! Usually importing adds 20% extra input costs.
- Export deals are VERY important for generating profits. However you will never find their impact in the Almanac.
This was quite a complicated guide. Feel free to ask for help or additional information in the comments!
