Final answer:
A firm's main source of profitability and sustainability is managing financial capital, primarily acquired by reinvesting profits, borrowing, or selling stock, allowing investments in human capital and R&D for long-term growth.
Step-by-step explanation:
In today's business environment, a firm's main source of profitability and sustainability is a combination of factors including financial resources, human resources, technological resources, and marketing resources. However, when we consider the core of what allows a firm to generate profits and ensure long-term sustainability, the answer tends to focus on the firm's ability to generate and manage financial capital. Firms primarily acquire financial capital by reinvesting profits, borrowing from banks or through bonds, and by selling stock. Profits, when sufficiently high, provide the financial capital needed to invest in human capital, technology, physical plant, and equipment, which are essential for growth and competitive advantage. Firms must make strategic decisions to spend money on assets like machines, new plants, or research and development projects that will potentially yield profits in the future.