Think of it as a river with a series of lakes. The flow down the river is cash flow. The lakes are the forms the money takes. The ideal is to have enough water coming into your lake to counter what you are going to have to send downstream. When you realize that water, like money, is a finite resource. It is a cycle that never ends. money comes in many forms, like water. And the vast majority of it is not in a form that can be accessed. The amount of rise or fall of the lake level is the net income, and the amount of water coming in from the tributaries and rainfall is the gross income.

The point is, think of how our lakes are affected by heavy rains and drought. It makes the same issues as money does. When we do not have the water we need, it is the same as not having the money where we want it. but since it is a constant, it has to go somewhere.

Carrying an 8% profit margin is not striking it rich and is problably lower then 90% of other industries. Tax them into lower profit margins and the price of a gallon will go even higher.

And now one of the candidates wants a windfall profit tax on the oil companies and then give a $1000 energy rebate to consumers...

Your gas pump prices will be rising again.

A mere 8.4% after all costs, salaries, taxes and write-offs?

If I could make that on every car I sell, I would have retired years ago.

Most car dealerships, when all the smoke clears in sales, service, parts and rental, operate on 1-1.5% profit when the economy is GOOD. 2% is considered stellar performance, and means huge profits for the dealership.

8.4% is not a "normal" number in many parts of the corporate world.

Exactly Troop. EXACTLY!!!

That's 8% LEFTOVER after they hid everything possible, just enough to keep their stock price up. There's billions going to "hidden" profits.

D

Specifics?

And, that 8.4% is steady as their revenue has doubled because they've raised the price of their product by double in the past three years.

Their costs haven't doubled. That means they are probably awash in cash as well. The thing I like least about Exxon-Mobil is that I'm not an executive there...

The average profit margin of the S&P 500 companies is 8.5%
These are large cap American companies. I guess there could be many more "windfall" taxes to come

S&P 500

Bingo!

Pretty outlandish statement.

Care to back that up with facts and perhaps a little proof?

Ummm if their revenue doubled and their profit margin remains the same their costs had to rise. Doubling your revenue while at the same time maintaining your costs and margain is mathematically impossible.

Even the posted article mentions on the refining side that their costs doubled while the price of gas has gone up 30%.

Well, more on the "what's the real profit" debate later.

Meanwhile: Chevron's profit soars 11%, shares dip. http://money.cnn.com/2008/08/01/news/companies/chevron_profit.ap/index.htm?cnn=yes

Troop, while your side may not make more than 2% net, the service side is closer to 12% to 15%. I have customers in that business.

Also, you guys should better define what you think corporate is, because there are a lot of small businesses, which are corporations, that would be disappointed only putting 8% to the bottom line.

Cisco Systems needs to be stopped!!

CISCO SYSTEMS INC (NASDAQ: CSCO)

Pre-Tax Profit Margin 28.8%
Post-Tax Profit Margin 21.1%
Net Profit Margin (Total Operations) 21.1%


I sure hope they don't get "Windfalled" or I might be out of a job. Cisco makes up probably 80% of my business.

Excellent point, Bank. If I had to live on 8% margins, my business would need to be triple its current size!