Posted by AuntieMel on March 20, 2006, at 17:28:11
Company A has a balance sheet:
(A)Revenues......37,099.9
(B)Costs.........31,256.6
Income before tax(C).........5,943.2 (A - B)
Income tax...................2,330.2
Net Income...................3,613.0So, in effect, Company A gets to "keep" (meaning it's stockholders make) a little less than 10% of what it takes in.
Now - Company B:
(A)Revenues......23,104.0
(B)Costs.........17,019.0
Income before tax(C).........6,690.0 (A - B)
Income tax...................1,818.0
Net Income...................4,972.0So, company B gets to keep a little more than 20% of what it takes in.
But company A has had the best year in a long, long time. And company B has these results year after year.
Which one would you say has the better deal???
----------
Now - the units are wrong. On company A the numbers should have a zero added to the end. Which means it actually makes more money than company B. This is a matter of scale, though, because company A is actually that much bigger.
Company A gets hauled off to congress for it's obscene profits (ExxonMobile)
No one squawks about company B (Coca-cola)
poster:AuntieMel
thread:622564
URL: http://www.dr-bob.org/babble/poli/20060304/msgs/622564.html