Final answer:
It is false that most small businesses show a profit after the first fiscal year, as achieving early profitability is difficult and many small businesses fail within the first few years.
Step-by-step explanation:
The statement that most small businesses show a profit after the first fiscal year is false. Achieving profitability is a significant challenge for new businesses. While every business aims to make a profit, which is calculated as Profit = Total Revenue - Total Costs, not all succeed in the short term. The reality is starkly presented by the U.S. Small Business Administration's statistics, which show that in the years 2009–2010 and 2011, the number of businesses that 'exited' was greater than those that 'entered'. This signifies that a substantial portion of small businesses fail to survive, let alone generate a profit within their first year.
Additionally, the pattern seen in corporate profits, which according to the Federal Reserve Economic Data, shows that while profits for larger corporations have generally increased each year, this trend faced a sharp decline during the 2008-2009 period. This underlines the challenges businesses face in maintaining profitability.