Attention: TDR Forum Junkies It drives me nuts when people focus on one number, of a much larger formula, that means NOTHING when considered by itself. Profits up 69% - So What! What's the rest of the information??? At a minimum, one must consider the gross profit percent (of revenues) for any discussion on the increase of profits to have any meaning. All it takes is 5 minutes of "googling" exxon (or whoever else's) financial results to make a more educated statement instead of looking like a fool by focusing on the media hype of one number.
To answer the GP% question above, it happens to be 9. 3% (10. 6B profit on revenues of $114B), which is definately not an excessive figure for gross profit percent (especially for an industry that is so capital intensive). Most companies won't see long term viability at 10%, and the rule of thumb cut off for capital decision making is an ROI (return on investment) of 15-20%. The major oil companies have been operating at GP%'s of 6-10% over the last 5-6 years, where we've seen the spikes in oil and fuel prices.
Bottom line, I just wish people would do 5 minutes of simple research before buying in to the media hype and discussion that focuses on one part of a much bigger picture. Reminds me of when I run in to the greenpeace activists when walking at lunch downtown - they ask of I support the oil companies and their record profits, I tell them I will be happy to talk with them if they spent any time actually researching the financial statements of ANY big oil company to understand what the numbers they are trying to preach about mean. Needless to say I haven't missed any walking time yet.
Last edited by a moderator:
