Profit Margin

desandrews
desandrews Posts: 143
edited February 2007 in A Moving Train
Do you believe businesses should be bound by an "adequate" profit margin? If so, how much is adequate? Should it differ by industry?
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  • soulsinging
    soulsinging Posts: 13,202
    by law? no.
  • The Illinoisemakers
    The Illinoisemakers Posts: 461
    Could you please explain what you're asking a little more? Are you suggesting gov't should set up a percent for businesses on what they can earn? Just curious exactly what you are thinking.
  • miller8966
    miller8966 Posts: 1,450
    desandrews wrote:
    Do you believe businesses should be bound by an "adequate" profit margin? If so, how much is adequate? Should it differ by industry?

    absolutely not. What would be a good reason for it?
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  • jlew24asu
    jlew24asu Posts: 10,118
    desandrews wrote:
    Do you believe businesses should be bound by an "adequate" profit margin? If so, how much is adequate? Should it differ by industry?


    are you insane?
  • Pacomc79
    Pacomc79 Posts: 9,404
    no, the word is speculative and it's counterproductive not to mention the shady dealings you would get from politicians. Competition is the best method of profit control. Healthy competition is good for any market. It's one of the reason ticketmaster sucks so much....no competition but their lobbiests protect thier monopoly and people continue to buy their products.

    However, I do see some benifits to certain industries regulation.

    Insurance and Drug companies could use some regulation.

    50 years ago we weren't all bound to our employers to pay half of the medical insurance bill and one didn't have to sell ones house to get an operation.
    My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
  • desandrews
    desandrews Posts: 143
    The Illinoisemakers wrote:
    Could you please explain what your asking a little more? Are you suggesting gov't should set up a percent for businesses on what they can earn? Just curious exactly what you are thinking.

    I'm not sure what I'm thinking. My brain barely works today. I'm not thinking about a law or anything, I'm just wondering at what level will people be "outraged" so to speak? How much profit's too much profit? What's just right and should different industries be held to different standards?

    I guess to add on to that, do you care what the absolute profit levels are or do you care about margin?
  • surferdude
    surferdude Posts: 2,057
    desandrews wrote:
    Do you believe businesses should be bound by an "adequate" profit margin? If so, how much is adequate? Should it differ by industry?
    No, unless the povernment is also going to gaurantee an "adequate" profit margin. But we've all seen what a grand success communism was.

    Taxes are how government keep a company bound to an "adequate" profit margin. I still think it's a joke to tax a company. Whatever happened to no taxation without representation. Companies can't vote so why should they be taxed. I'm not sure why we allow them to make contributions to politicians either.

    We'd be better off just taxing the income when it is distributed to people.

    Competition and freedom of choice are the best ways to keep margins "adequate".
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  • desandrews
    desandrews Posts: 143
    surferdude wrote:
    No, unless the povernment is also going to gaurantee an "adequate" profit margin. But we've all seen what a grand success communism was.

    Taxes are how government keep a company bound to an "adequate" profit margin. I still think it's a joke to tax a company. Whatever happened to no taxation without representation. Companies can't vote so why should they be taxed. I'm not sure why we allow them to make contributions to politicians either.

    We'd be better off just taxing the income when it is distributed to people.

    Competition and freedom of choice are the best ways to keep margins "adequate".

    fairtax.org anyone?
  • soulsinging
    soulsinging Posts: 13,202
    surferdude wrote:
    No, unless the povernment is also going to gaurantee an "adequate" profit margin. But we've all seen what a grand success communism was.

    Taxes are how government keep a company bound to an "adequate" profit margin. I still think it's a joke to tax a company. Whatever happened to no taxation without representation. Companies can't vote so why should they be taxed. I'm not sure why we allow them to make contributions to politicians either.

    We'd be better off just taxing the income when it is distributed to people.

    Competition and freedom of choice are the best ways to keep margins "adequate".

    you know, if corporate political donations were uniformly banned, i would be a-ok with ending corporate taxation. it'd be a small price to pay to keep moneyed interests out of politics. the trouble is, they'd still fund things like those swift boat ads.
  • desandrews
    desandrews Posts: 143
    Pacomc79 wrote:
    no, the word is speculative and it's counterproductive not to mention the shady dealings you would get from politicians.

    However, I do see some benifits to certain industries regulation.

    Insurance and Drug companies could use some regulation.

    50 years ago we weren't all bound to our employers to pay half of the medical insurance bill and one didn't have to sell ones house to get an operation.

    I don't see regulation and profit really going together in the same conversation. Regulation, as we typically see it today, will increase or decrease the costs of doing business which in turn will increase or decrease the cost of the product, but profit's always that last little thing tacked on to the end no matter what the cost is.

    For example, forcing insurers to cover rehab (aka offer more coverage) translates into charging higher prices. I'd like to buy a health insurance policy that only covers me when the shit really hits the fans, forget about buying me new tires and replacing my windshield wipers.
  • desandrews
    desandrews Posts: 143
    desandrews wrote:
    I guess to add on to that, do you care what the absolute profit levels are or do you care about margin?


    Anyone? I find it interesting that we hear a lot about the profit level of ExxonMobile in the 4th quarter of 2006, but I didn't hear what the margin was? Anybody got that information? How does that compare to other companies like, Microsoft for example?
  • jlew24asu
    jlew24asu Posts: 10,118
    desandrews wrote:
    Anyone? I find it interesting that we hear a lot about the profit level of ExxonMobile in the 4th quarter of 2006, but I didn't hear what the margin was? Anybody got that information? How does that compare to other companies like, Microsoft for example?


    you are comparing two very different companies in terms of what they sell. but thats ok. exxon actaully has low profit margin compared to others. in part because the price of what they sell is not set by them.

    http://www.usatoday.com/money/industries/energy/2006-04-27-xom_x.htm
    And Exxon's profit margins are below-average compared with others that have triggered no outcry. Exxon's first-quarter profit margin was 9.4%, meaning it kept 9.4 cents of every $1 in revenue. Microsoft kept 27.3 cents of every $1 in revenue in its most recent quarter; General Electric, 11.4 cents and McDonald's, 12.3 cents. In fact, Exxon is below the 11-cent average of Standard & Poor's 500 companies, says analyst Howard Silverblatt.
  • desandrews
    desandrews Posts: 143
    jlew24asu wrote:
    you are comaring to very different companies in terms of what they sell. but thats ok. exxon actaully has low profit margin compared to others. in part because the price of what they sell is not set by them.

    http://www.usatoday.com/money/industries/energy/2006-04-27-xom_x.htm

    And Exxon's profit margins are below-average compared with others that have triggered no outcry. Exxon's first-quarter profit margin was 9.4%, meaning it kept 9.4 cents of every $1 in revenue. Microsoft kept 27.3 cents of every $1 in revenue in its most recent quarter; General Electric, 11.4 cents and McDonald's, 12.3 cents. In fact, Exxon is below the 11-cent average of Standard & Poor's 500 companies, says analyst Howard Silverblatt.

    Well, the ExxonMobile haters on this board are at least smart enough to never enter threads they know will end with some crazy facts like this.
  • jlew24asu
    jlew24asu Posts: 10,118
    desandrews wrote:
    Well, the ExxonMobile haters on this board are at least smart enough to never enter threads they know will end with some crazy facts like this.
    yea I never understand the exxon hatters around here. has something to do with Bush I think.
  • farfromglorified
    farfromglorified Posts: 5,700
    desandrews wrote:
    Do you believe businesses should be bound by an "adequate" profit margin? If so, how much is adequate? Should it differ by industry?

    Yes. It should be 1,000,000,000,000%. No less. That'll be $30,000,000,000,000 for your next value meal.
  • desandrews
    desandrews Posts: 143
    jlew24asu wrote:
    yea I never understand the exxon hatters around here. has something to do with Bush I think.

    So when Hillary's president it'll be ok to make record profits I guess.
  • jlew24asu
    jlew24asu Posts: 10,118
    desandrews wrote:
    So when Hillary's president it'll be ok to make record profits I guess.
    o good god I hope shes not. then she will tax the snot out of you and me while exxon's profits grow.
  • blackredyellow
    blackredyellow Posts: 5,889
    Pacomc79 wrote:
    no, the word is speculative and it's counterproductive not to mention the shady dealings you would get from politicians. Competition is the best method of profit control. Healthy competition is good for any market. It's one of the reason ticketmaster sucks so much....no competition but their lobbiests protect thier monopoly and people continue to buy their products.

    Just to argue a point, ticketmaster isn't a monopoly... There are several other ticket companies that provide the same service as ticketmaster (tickets.com, paciolan, tessatura, and many other smaller companies).
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  • JOEJOEJOE
    JOEJOEJOE Posts: 10,840
    desandrews wrote:
    Do you believe businesses should be bound by an "adequate" profit margin? If so, how much is adequate? Should it differ by industry?

    without reading any further posts, it seems as if you are indirectly asking about whether or not the govt should regulate monopolies.
  • Pacomc79
    Pacomc79 Posts: 9,404
    blackredyellow wrote:
    Just to argue a point, ticketmaster isn't a monopoly... There are several other ticket companies that provide the same service as ticketmaster (tickets.com, paciolan, tessatura, and many other smaller companies).


    and what a fantastic level of competition they provide.
    My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.

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