American Elephants


Best Headline Of The Week! by The Elephant's Child

Economist Mark J. Perry, wrote at the American Enterprise Institute:

Why do progressives hate Walmart for low prices and its 3% profit margin but love high-priced Apple and its 24% profit margin?

Evil Walmart makes a lot of money, right? We hear that all the time even though the retail giant’s profit margin was only 3.12% in the most recent quarter. Interestingly, we never seem to hear as much about the much higher profit margin of Apple, the “darling of the progressives.” In the most recent quarter, the computer behemoth with a market capitalization ($725 billion) that exceeds the value of the entire stock markets of Mexico, Thailand and Russia, had a whopping profit margin of 24.2%. No wonder its market cap is so astronomical.

Here’s one way to put Walmart’s 3.12% profit margin in perspective. Over a typical 31-day period like the month of March for example, Walmart generates about $40.5 billion in sales revenue (roughly $1.3 billion per day). To generate that amount of sales, it costs Walmart about $39.3 billion every 31 days to pay for all of its expenses: merchandise to stock its stores, shipping expenses, the cost of labor including fringe benefits, utilities, corporate income taxes, property taxes, payroll taxes, interest expenses, advertising, etc. After incurring all of those costs to provide the merchandise for consumers over a 31-day period, there’s about $1.26 billion left over for profits, which is also 3.12% of the $40.5 billion in sales revenue.

In contrast, Apple’s whopping 24.2% profit margin means that the company can typically cover its costs to operate for 31 days in a little more than three weeks (23.5 days) and it then usually has 7.5 “profit days” every 31 days. That is, for more than an entire week every month, all of the sales revenue collected by Apple during those 7.5 days turns into profits for Apple’s shareholders.

Do read the whole thing. There’s lots more, and a good lesson in both politics and economics. And Progressivism as well.



Wednesday Stack of Stuff by American Elephant

Part of the problem with blogging is that there are so many interesting storied to write about, and nowhere near enough time to write about them all. Here’s just some of the stories catching my attention:

How will Obama block it? — “New drilling method opens vast oil fields in US”

Heh heh — AOL Buys HuffPo, stock takes $315 million dive

Jennifer Rubin“Obamacare Support Melting Away”

iBubble? —  “Apple is Most Valuable Company on Earth: Analysts”

First GOP Senate pick up?“Webb won’t seek re-election”

Gallup — Poll: Obama 68% disapproval on Defecit

Progressive Control Freaks  still controlling — Boston to ban smoking in parks?

Most corrupt administration ever #1 — Obama fired another investigator for doing his job.

Most corrupt administration ever #2 — Emanuel/Blagojevich phone calls conveniently go missing

NASA shock — New 3D photographs reveal Sun looks remarkably the same from all sides




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