What would happen if corporations can only make a maximum profit of 10% per product I have learned in accounting that companies can add any amount of profit on their products as they want. That can be 10 - over 500 %. 

I also think that international corporations like Coca Cola, Nestlé definitely make more than 200 % profit for each of their products (does anybody know how much).

I don't know much about what is done with that profit, as every cost the company has is already included in the price. That is not the question here.

My question is: What would happen if by law EVERY company on this planet can only make a maximum profit of 10 % for each product. When answering please ignore potential legal loopholes or anything similar. 

Prices would definitely decrease but what about wages for workers. They would stay the same, because the profit doesn't affect them. Only the wage for managers and CEOs would decrease. But what about international economics. Would it remain stable.

And the most important question: Can a law like that (if valid in every country) actually work on long-term? This is a similar question as "Can communism/socialism work?" but It is also a little bit different.
I also think that international corporations like Coca Cola, Nestlé definitely make more than 200 % profit for each of their products (does anybody know how much).


How are you defining profit?  

Coca Cola, first quarter 2018
Net income:  \$1.37 billion
Revenue:  \$7.6 billion
Profit:  18%
Percentage markup:  22%

Nestle was higher in the second half of 2017, around 49.9% profit or 98% markup.  

I don't know which, but if you are getting 200+%, I think that you are leaving out a lot of costs.  If you enforced that standard, companies would go out of business, because you aren't leaving enough for operating expenses.  

If all companies, even the risky ones, could only have 10% profit, their product prices would tend to swing greatly.  Because when their costs are high relative to their revenues (e.g. in a recession), their prices would go up.  When costs are relatively low, their prices would be restrained.  So they would be cutting prices in good markets and increasing them in bad markets.  

Companies would also have trouble financing through equity, which is rewarded by profits.  They would have to borrow, as that would show up as costs.  But it's hard to borrow unless a company is already profitable.  So no venture capital startups.  

Companies would also tend to become bigger.  Because it is easier for a company that does many things to make sure that some are not so profitable.  And of course they wouldn't have to worry about startups stealing their business.  

Companies would take few risks.  Because the maximum return is 10%, they have no incentive to pick the riskier choices.  They might just as well pick the safe choice, as it has the same return.  Progress would slow.  

To engage in things like pharmaceutical development or oil discovery, companies would basically write off the upfront costs (to minimize profit).  Then if they actually succeeded, they'd have to engage in a flurry of additional costs so as to get full value for their products.  So the companies engaging in such behavior would expand revenues quickly.  And only companies that are already profitable could undertake the most profitable activities.  

This encourages companies to out and out waste money.  Higher costs means a higher base, so the 10% is bigger.