Gas Prices......

[A.P. Photography]

ok this stuff is annoying.

the profit margins were nearly the same.
there is a difference between PROFIT
and PROFIT MARGIN

for example.

say your company makes 1 million dollars a year.
now you subtract your operating costs which are 930,000
you made 70 000$ profit

now
to find the profit margin
divide the 70 000 by 1 000 000
you get
0.07
=
7%

now say the next year, you make 2 000 000
and you have double the operating costs of last year,
930 000 x 2 = 1 860 000
so subtract that from the revenues, you get
140 000

DOUBLE THE PROFITS! right? yes, but.
what is the profit margin you ask?

divide 140 000 by the revenues, 2 000 000

its still 0.07

while you can hype up everyone by saying profits were XXXXXXX
or in this case PROFITS DOUBLED!

they are the same percentage of last year.

So whats todays lesson?

Don't beleive the media hype.

Actually after all that, which makes sense, you are way off.

There was no increase in oil but rather a decrease in production capabilities and flow obstructions. So the cost to produce xxx number of barrels into usuable products never changed as they either produced less or the same amount. The rationing of items and the price of gas going up is where there record profits came from. Example, it costs you $30 to make product A. You produce 50 a quater and they sell for $60. Demand soars driving the price to $200 but you still only produce 50 a quater at a cost of $30 each. Therefore you have a record profit for x quarter. This is basically what happend in the oil market.

[God]

Actually after all that, which makes sense, you are way off.

There was no increase in oil but rather a decrease in production capabilities and flow obstructions. So the cost to produce xxx number of barrels into usuable products never changed as they either produced less or the same amount. The rationing of items and the price of gas going up is where there record profits came from. Example, it costs you $30 to make product A. You produce 50 a quater and they sell for $60. Demand soars driving the price to $200 but you still only produce 50 a quater at a cost of $30 each. Therefore you have a record profit for x quarter. This is basically what happend in the oil market.

haha i know i was making a fake company as an example.
most people see it as "they are making a profit so they must be price gouging" its so freaking annoying.
and then you have idiots like hilary who said the other day the us needs to seize the excess profits of oil companies.
if that doesnt prove shes a socialist i dont know what is.

[chrisdavis]

haha i know i was making a fake company as an example.
most people see it as "they are making a profit so they must be price gouging" its so freaking annoying.
and then you have idiots like hilary who said the other day the us needs to seize the excess profits of oil companies.
if that doesnt prove shes a socialist i dont know what is.

I never said anything about price gouging. What I was reffering to is when this happened in the 80's there was a public outcry and boycotts. After Katrina people rushed out and pushed the prices way up and didnt complain. Now the prices are up and with no resistance from the consumer there is no need for the oil companies to reduce them. My only disagreement is the tax break that congress alotted the oil companies, they were already posting profits before the tax break.

[God]

I never said anything about price gouging. What I was reffering to is when this happened in the 80's there was a public outcry and boycotts. After Katrina people rushed out and pushed the prices way up and didnt complain. Now the prices are up and with no resistance from the consumer there is no need for the oil companies to reduce them. My only disagreement is the tax break that congress alotted the oil companies, they were already posting profits before the tax break.

i wasnt disagreeing with the tax part, i wish we would move to the fair tax system linder and boortz are trying to push through. and i wasnt talking about you when i said price gouging, i said most people. like this past sundays paper, in the "vent" section of the ajc
so many idiots talking about it. but,
thats what you get from government schools

[chrisdavis]

i wasnt disagreeing with the tax part, i wish we would move to the fair tax system linder and boortz are trying to push through. and i wasnt talking about you when i said price gouging, i said most people. like this past sundays paper, in the "vent" section of the ajc
so many idiots talking about it. but,
thats what you get from government schools

My wife is all for the fair tax system, my concern is what if the tax percent is too low and they have to raise it. My wife says it is written into the bill that the percentage cannot be raised, if thats the case then I am all for it.

[Kristi]

Actually after all that, which makes sense, you are way off.

There was no increase in oil but rather a decrease in production capabilities and flow obstructions. So the cost to produce xxx number of barrels into usuable products never changed as they either produced less or the same amount. The rationing of items and the price of gas going up is where there record profits came from. Example, it costs you $30 to make product A. You produce 50 a quater and they sell for $60. Demand soars driving the price to $200 but you still only produce 50 a quater at a cost of $30 each. Therefore you have a record profit for x quarter. This is basically what happend in the oil market.

boy aren't we smart

[A.P. Photography]

boy aren't we smart