Comments on: Democrat Attack Math http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/ Summum nec metuas diem, nec optes - Marcus Valerius Martialis Thu, 19 Apr 2012 09:00:56 +0000 hourly 1 http://wordpress.org/?v=3.0.4 By: Blue Crab Boulevard » Blog Archive » The Democrat’s Wal-Mart Jihad http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/comment-page-1/#comment-17901 Blue Crab Boulevard » Blog Archive » The Democrat’s Wal-Mart Jihad Sat, 26 Aug 2006 03:56:06 +0000 http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/#comment-17901 [...] Obviously, anyone who reads here knows how I feel about the Democrat's appallingly stupid jihad against Wal-Mart. But hey, if they really think driving the over 120 million people who shop there each week away from their party is a good policy, why should I bother speaking out? Besides, there are others doing a very nice job of eviscerating the foolishness. [...] [...] Obviously, anyone who reads here knows how I feel about the Democrat's appallingly stupid jihad against Wal-Mart. But hey, if they really think driving the over 120 million people who shop there each week away from their party is a good policy, why should I bother speaking out? Besides, there are others doing a very nice job of eviscerating the foolishness. [...]

]]> By: The Truth http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/comment-page-1/#comment-17275 The Truth Fri, 18 Aug 2006 16:43:38 +0000 http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/#comment-17275 Percent profit on revenues is not at all analogous to return on a savings account--it's more analogous to how much you're able to save each year as a percentage of your income. More analogous to the savings account is return on assets, which for Wal-Mart was 8.9% in FY 2006, 9.3% in FY 2005, and 9.2% for FY 2004. I don't know enough about their industry to know whether this is spectacular, but it does seem pretty good. Retail businesses typically have low rates of return as a percentage of revenue because their inventory turnover tends to be high. Here's a little example. If I invest $100 in inventory, sell it for $110, and turn it over 5 times, I've made $50 on a $100 investment (50% ROI), but only a 9.1% return on revenue ($50 on $500). If, on the other hand, I invest $250 in inventory, sell it for $300, but only turn it over twice, I've made $100 on a $250 investment (40% ROI) even though my return on revenue is an impressive 16.7%. The first example actually is a better financial performance, even though the second has a better return as a percentage of revenues. It's an old PR trick of retail businesses in labor negotiations to make it look like they're barely squeaking by by using return on revenue. It's also a trap that uninformed business people sometimes fall into. Percent profit on revenues is not at all analogous to return on a savings account–it’s more analogous to how much you’re able to save each year as a percentage of your income.

More analogous to the savings account is return on assets, which for Wal-Mart was 8.9% in FY 2006, 9.3% in FY 2005, and 9.2% for FY 2004.

I don’t know enough about their industry to know whether this is spectacular, but it does seem pretty good.

Retail businesses typically have low rates of return as a percentage of revenue because their inventory turnover tends to be high.

Here’s a little example. If I invest $100 in inventory, sell it for $110, and turn it over 5 times, I’ve made $50 on a $100 investment (50% ROI), but only a 9.1% return on revenue ($50 on $500).

If, on the other hand, I invest $250 in inventory, sell it for $300, but only turn it over twice, I’ve made $100 on a $250 investment (40% ROI) even though my return on revenue is an impressive 16.7%.

The first example actually is a better financial performance, even though the second has a better return as a percentage of revenues.

It’s an old PR trick of retail businesses in labor negotiations to make it look like they’re barely squeaking by by using return on revenue. It’s also a trap that uninformed business people sometimes fall into.

]]> By: tom scott http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/comment-page-1/#comment-17227 tom scott Fri, 18 Aug 2006 06:31:09 +0000 http://bluecrabboulevard.com/2006/08/17/democrat-attack-math/#comment-17227 I've been rounding up some articles to rebut Washington Senator Maria Cantwell's claims of gas gouging. I noticed Wal-marts percent of profit of their revenues. <a href="http://money.cnn.com/magazines/fortune/fortune500/full_list/" rel="nofollow">Here is the page</a> to view some of the companies. Take a look at Microsoft and Citigroup. <a href="http://taxprof.typepad.com/taxprof_blog/2005/10/gas_taxes_excee.html" rel="nofollow">This is an interesting post.</a> Also about gas taxes and who the real gougers are. I’ve been rounding up some articles to rebut Washington Senator Maria Cantwell’s claims of gas gouging. I noticed Wal-marts percent of profit of their revenues. Here is the page to view some of the companies. Take a look at Microsoft and Citigroup.
This is an interesting post. Also about gas taxes and who the real gougers are.

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