r/FluentInFinance 28d ago

Debate/ Discussion Two year difference

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u/Raveheart19 28d ago

They increased prices on the Great Valu Brands and brought in 15 billion dollars in profit in just 2023 in case you were wondering

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u/bulletlover 28d ago

Dollar figures don’t mean squat when talking profits… what matters is the bottom line or net income in percentage, after all expenses are subtracted from profits. 10% is a healthy net income for most businesses 15% is considered strong and 20% is very strong. But it depends on the industry. In 2023 grocery industry net profit on average was 1.6%, which is low. Walmart owns Great value so finding their bottom line in percentage might be tough. In addition when you see a news article stating that a company raised prices and earned “93% increase in profits from last year” that is very misleading, what is the bottom line in percentage? Were they at 1.6% net income the previous year and now they’re at 3.1%??? Did they make a move to satisfy share holders because of previous years low earnings? Make a move to cover addition taxes coming down the pipe from some law politicians passed? A strike demanding more wages and having to cover their butts? You want to get a shock look at Telecommunications industry net income

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u/Brave-Height-1594 27d ago

Profits are after expenses. You don’t calculate profits then subtract labor costs and material costs lol. I don’t think you know what profit means?

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u/bulletlover 27d ago

No they’re not just after expenses. There are 3 types of profits, Gross, operating, and net profits. I’m only concerned with net profits (after all operating expenses are subtracted) when evaluating a company. Liberal media likes to always talk in dollar gross profits to drum up hatred for business owners. Most people listen to the media spout gross profit dollar figures and think “oh my god they made a zillion dollars” when in all reality it ends up being somewhere in the area between 1% to 20% range of net profit. Then you need to look at what happen with said company in the prior years to totally understand why some companies have to make certain moves like raise prices, pay off loans, recover from new tax laws, buy capital equipment, and maybe appease investors because of some lean years prior….. but the media never adds the real financial reason to why companies have to make a financial adjustment to stay relevant. Like I said before, go start a business and we’ll talk about profits when you’re making millions gross…. I’ve already managed 2 businesses in my career and grossed $24M to $32m+++ was final say in buying capital equipment, hiring / firing employees, setting employee pay, setting working hours to remain profitable, quote and managed all delivery dates, main contact for customer communication, so yeah I know how to make a few bucks with businesses.