Abstract: The previous documents on effects of knowledge capital are concentrated in the high-tech industries, while the effects on traditional industries are somewhat neglected. With the help of VAIC method, this paper makes a three dimensional model-tangible capital, human capital and structural capital-to analyze their different contributions in enterprises’ profitability and the underlying mechanism, and takes 178 enterprises listed in Shanghai and Shenzhen Stock Exchanges as research objects. The conclusion tells that human capital representing knowledge capital makes a major contribution in enterprise profitability and hence plays a crucial role in enterprise operating.