Current Events — HabitableZone

Current Events » in reply to It's not sticking with me, either.

Re: Not following you.
er — (archived)

I set no standards or criteria. All I say is that any company with overall sales growth like this in this kind of economy, as well as such an increase in profits, in both relative and absolute terms, is not by any stretch of the imagination in trouble. In fact, it's doing a land office business. It certainly isn't very reminiscent of any heroic attempt by management to keep corporate costs and consumer prices down in a desperate bid to survive in a highly competitive market.

4.62G$/2.98G$ = 1.55 = 55% absolute rise in net income in two years. During that same interval, gross income increased by 92.9G$/81.19G$ = 1.14 = 14% absolute rise. (Again, assuming late 2010 performance is comparable to the first 2 quarters). They are making money almost 4 times faster than they are selling product. I don't see why pointing this out is in any way misleading. In fact, I'd be willing to bet that's exactly how they proudly brag about it to their shareholders.

This is a massive company, not a neighborhood furniture store or fast food franchise, easily affected by market whims and desperate competitors. That's a lot of financial inertia to overcome, and it requires a lot of F = ma, to continue my physical analogy. This is a major reason why health care costs are rising. These companies have absolutely no incentive to cut costs as long as their profits are increasing faster than their income, no matter what their competition is doing. I.E., this is a classic example of an UNfree market.

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