any one know about business finances?

[lil_dcb7]

Im trying to see if i can learn a little about the stock market and such.

some thing im trying to figure out, is how a company can have an increase in revenue, but continue to fail at turning a profit?

the company in question:

http://investorshub.advfn.com/boards...?board_id=6981

[slammed4thgen]

some thing im trying to figure out, is how a company can have an increase in revenue, but continue to fail at turning a profit?

increased expenses, is the said company union?

also, alot of companies hide profit in company upgrades so they save on profit sharing. such as my work, they hide profit in "upgrades to facilitate" its bs for myself and fellow workers while they continue to make insane money...

[lil_dcb7]

increased expenses, is the said company union?

also, alot of companies hide profit in company upgrades so they save on profit sharing. such as my work, they hide profit in "upgrades to facilitate" its bs for myself and fellow workers while they continue to make insane money...

there is no union.

its really interesting. If you read through the profile, which i guess you skimmed (i did too lol) This AmeriResource and Delmar have owned the company since it started out as net2auction. Its a legit "warehouse" but its a complete rinkidink operation.

I dont know, it just amazed me how this company that was managed the way it is has so much involved with it.

[Leung]

increased expenses, is the said company union?

also, alot of companies hide profit in company upgrades so they save on profit sharing. such as my work, they hide profit in "upgrades to facilitate" its bs for myself and fellow workers while they continue to make insane money...

the company i work for does the same thing. we recently installed four self serve registers, new parking lot lights,and added an organics section to the store. we have quarterly meetings about store numbers which we've increased but because of those "upgrades" we don't get our profit sharing.

[owequitit]

Im trying to see if i can learn a little about the stock market and such.

some thing im trying to figure out, is how a company can have an increase in revenue, but continue to fail at turning a profit?

the company in question:

http://investorshub.advfn.com/boards...?board_id=6981

The best options would be to take a basic economics class, then a basic investing class, and finally you can buy basic books on how this stuff works. It is VERY complex and tedious. From there you will have a natural idea what to branch out into. Corporate Finance would also be a great course to take, as you learn how companies create and account for their money. You learn why they make the decisions they do, in the order they do, and how they maximize gain, while minimizing taxes. You also learn how to read a balance sheet, and what all those funny numbers mean, and where they came from.

As for this particular companies numbers, it is hard to say. There is a lot of discretion in accounting. There are certain guidelines they generally follow, but there are usually more than 1 way to do it.

Also, revenues are completely independent from profits. Revenue is simply all the money that comes in, and profits are what is left over when the bills are paid. If you release a new product, that isn't making more than it is costing, you will see an increase in revenue, with a decrease in profit. That is why it is important to understand things like the "break even point" of a new product or business decision. At that point, sales of that product begin to have a profit attached to them, whereas before that, they are a loss only.

You might also see a temporary decrease in profits and an increase in revenues during expansion. This is because it is typically very costly to expand a business, and while your revenues will increase due to new markets and customers, there will usually be a delay between the cost of expansion and profitability. You are laying out a large sum of cash up front, and then over time, the business starts to earn money, again with a break even point.

The other critical part to consider is that when making future based decisions (whether to remodel a facility, add a new one, or expand into new markets) the people crunching the numbers have no choice but to make educated guesses and assumptions because they can't see the future any better than you can. Sometimes, they make decisions based on these educated assumptions, and they turn out to be partly, or even mostly wrong. A good example would have been the skyrocketing of gas prices. Since some of these plans take a year or more to execute, it is likely that they didn't consider $4 a gallon gas when deciding to buy more trucks and increase their shipping activity. Such things would have a great impact on their results, because they have PLANNED on paying $3.00 a gallon, but ended up having to pay $4-5 a gallon. If you have a large number of trucks, that all burn a huge amount of gas, then it will make a difference. That is why you have to be flexible and rational when things don't go your way. The biggest failing of business people that I have met is their unwillingness to admit that things aren't working out like they had planned, and then refusing to adapt to the changes. That and not accounting for everything PRIOR to getting started. Sometimes shit happens, but sometimes people are in the wrong line of work.
They could also make false assumptions if they are pressured to by their bosses to make something look better than it is. That is called "cooking the books." It is being intentionally misleading with your accounting practices.

This isn't a political rant, but it is the best illustration I can think of in real terms for the average person.

In 2000 when the Treasury dept accounted for the budget and the "surplus" that was supposed to occur in 2001, they were told to assume that the market would continue to perform the way it had for the last 15 years. EVERY expert in the system was very clear about a slowdown occuring, and was very clear that the market would not continue to grow at the same rate it had. The government officials assumed it would anyway. The result of that assumption was that their accounting showed an increase in tax revenue that resulted in a budget surplus. However, the reality was far different.

The way the Federal Budget works is that they earmark spending based on what they are going to take in the following year, or at least they are supposed to. The problem is that the obligation side is set in stone prior to that year, because they have to have the money available and ready to go. The revenue side is a forecast. If there is any discrepancy between the two, they have to borrow money to make up the difference. It would be like me telling you that I will pay you $50 on the 1st of every month, based on someone paying me $60, and then they only end up paying me $30. That leaves me with having to borrow $20 a month or getting it from somewhere else. My surplus just became a deficit. Nothing changed other than the revenue picture.

The reality was that as the market slowed down, just like everyone knew it would, so did the tax revenues. This is simply because the same % of a smaller number is a smaller number. But the monetary outflow stayed the same. Revenue went down, payout stayed the same, and when they re-balanced the budget during Bush's first year in office, it had swung to a deficit. Now, by this time, Bush had been in office for a very short time, and NOTHING that he had done had effected the budget yet, because there is always at least a 1 fiscal year delay between government decision and action, i.e. they vote on the budget for 2009 in 2008, but it doesn't go into effect until the following year, and not all money gets paid out on the 1st.

So based on a set of assumptions they chose to follow, they in effect were wrong. I have a problem with that particular case, because they did it misleadingly, and intentionally, so that they could look like heroes leaving office with a balanced budget. Then when Bush gets into office, the average Joe will just assume it was his fault because he is in office. Like Bush or not, it wasn't his fault.

THAT is a good example of cooking books, and it is also a good example of how revenues or profits, or both can fall short of expectations. It is an imperfect science, but if you try really hard, and are good at what you do, you can get pretty close.

I can give you some ISBN# if you want them. There is a lot of jargon to learn, and a lot of technical stuff, but honestly, it is amazing and fascinating to learn how money is created, used and sometimes lost.

I think CNBC.com probably still has a bunch of good learning material, and they used to even have a free software that allowed you to create an imaginary portfolio of whatever $$ amount you choose, and actually buy and sell stocks and commodities. It is a great tutorial, and if you want to actually invest money at some point, you can use it to do that too.

[owequitit]

increased expenses, is the said company union?

also, alot of companies hide profit in company upgrades so they save on profit sharing. such as my work, they hide profit in "upgrades to facilitate" its bs for myself and fellow workers while they continue to make insane money...

When they upgrade a facility, that is NOT profit. Good business people reinvest in their companies, that is partly what they are for. If they just sent all that profit home with people every quarter, how do facilities get fixed, or upgraded, or expanded or improved? They don't. Unless the company borrows money, which increases expenses and reduces profit anyway. It isn't like they see an immediate profit on the upgrades either. It takes YEARS for that stuff to pay for itself in most cases.

They aren't screwing you out of money. They are trying to make sure that you will be working for a company that in several years can still provide you with a job. Profit sharing is a bonus, not an entitlement. As such, it means just that. When you get it, it is a bonus.

Of course, they could give you an extra little bit of money here and a little bit of money there, and not put it into the company. And ain't life grand, eventually you will lose your job. Sounds like a winning plan to me.