Lets dispell some of these myths about big oil record profits and to do this I am going to have to define some things. If you can stick with it and not stop reading out of boredom, I hope I can change your mind. It isn't big oil, but our own government who is hurting us when it comes to oil prices.
Gross income is commonly defined as the amount of a company's or a person's income before all deductions or any taxpayer’s income, except that which is specifically excluded by the Internal Revenue Code, before taking deductions or taxes into account. For a business, this amount is pre-tax net sales less cost of sales.
Profit margin, Net Margin or Net Profit Ratio all refer to a measure of profitability. It is calculated using a formula and written as a percentage or a number.
For example, a company produces a loaf of bread and sells it for 10 units of currency. It cost the company 6 units of currency to produce the bread and it also had to pay an additional 2 units of currency in tax.
That makes the company's net income 2 units of currency (10 - 6, before tax, then minus 2 for tax). Since its revenue is 10 units of currency, the profit margin would be (2 / 10) or 20%.
Now that I have explained the difference between gross income and profit margin, let’s look at how liberals exploit figures and twist words to make big oil look bad.
The first thing they do is make sure to emphasize RECORD when they are talking about oil company profits. Right away, this makes people assume, even if subconsciously, that they are being taken advantage of. If the price of gas is so high, how can oil companies be making record profits? If an oil company makes a dollar more this year, when compared to last year, that would be a record profit. Another thing you must consider is that our population increases every year, as does our consumption of gasoline and oil products. I do not think anyone would argue that our gasoline usage is decreasing. If this is so, it only makes sense that sales are going to amount to more than the year before.
I don’t think anyone would fault the oil company for making enough money to cover it’s operating cost. After all, they can’t make less than what the product cost to produce and deliver, or they would go out of business. This is why we have to look at profit margin because it shows us exactly how much money the oil companies get to keep. The average profit margin of big oil is around 8%. This means that big oil is only getting to keep 8% out of those record profits. Eight percent of the oil companies gross profits still seems like a huge amount, until you consider that companies like Microsoft have a profit margin of over 20%. That is more than twice of the actual profit kept by big oil. Why is it that you never hear liberals complaining about their greed? After all, just think how many more computers could be available for our children if Microsoft’s profit margin was only 8%. That was just one example of many companies, which have an outrageous profit margin in comparison to big oil.
Let me ask you, who do you think these greedy shareholders are in big oil anyway? The majority of them are you and I. “What?” Yep, you heard me right. I would bet that if many of you were to look into where your 401k money is going, you would find that it is being invested in oil companies. I challenge you to check and prove me wrong. Find out exactly how your money is being invested. You might be surprised.
One last think I would like to mention, is that placing higher taxes on big oil, isn’t going to hurt the oil companies. Their profit margin will stay the same. A new tax is chalked up as an operating cost and then passed on to you at the pump. This is on top of the tax that the government already charges you for purchasing fuel. They already get anywhere from 40 – 80 cents per gallon in taxes, depending on where you are located. Doesn’t that infuriate you? Isn’t it bad enough that the government has had its hand in your pocket once? Now they are trying to dupe you into paying them again by getting you to support the tax that is supposed to curb the greed of big oil. Wake up America. It isn’t big oil that is being greedy and driving up price. It is our Congress and their inane taxes and environmental restrictions, which don’t allow us to look for oil here. The moment OPEC got wind that we were drilling for our own oil, the price would drop like a rock.Why should the oil companies be allowed to take in record profits on the backs of working class americans?
Amen. I was beginning to feel somewhat alienated and out of touch with reality as it seems no one cares about those record profits - people seem to simply assume that we are powerless... Ergo, some people seem to be of the view that those capitalist market fluctuations (in only one direction - up) are simply a natural and exclusive market response to the alleged growing demand for oil in rapidly expanding markets (China - communist?)... But that simple analysis ignores the fact that some other countries harbor much lower prices (Venezuela 17 cents a gallon!)..
Being who I am - I am passionate - I would advocate a socialist government which will simply step in and STOP these wild and unexpected sudden price increases.
As a realist, however, I am aware that people are afraid of ';communism'; - they seem to ignore the fact that fundamentally it's just a word.. That said, and because of same, we need some ';Managed Economy'; middle ground (disguised communism).. In the US the only tool is Antitrust laws (Sherman Act et al)...
Speaking of marketing, please do remember (I speak from experience) that if you market your beautiful bust your significant other will always ask him (or her) self if they are attracted to you b/c of the countours of your lovely ___... Or b/c your mind is truly engaging and moving in the right direction...
That said, nice bust.
:)
Redirect your anger at the politicians who wont let us drill in Anwar or anywhere else for that matter. They havent allowed us to be build new refineries either. Look next time you fill up and do some math and find out how small the profit of an oil company is compared to say a pharmeceutical company. Dont be duped by politicians who want you to see the oil companies as the bad guys and after all who are the oil companies the shareholders. Ask yourself who they are
The pensioners the people with 401ks and iras. They are your neighbors and your coworkers. Thats who oil companies are
You need to get educated and stop watching tv news for your info
That does seem odd, considering the big oil company's continue to say that prices are not their fault. That being said, why are they making record breaking profits. If I own a hot dog stand, and suddenly hot dogs are difficult to come by, but I actually make my own, then I super up the price of my hot dogs, Is it my complicit action that makes me wealthy? Of course it is. If my entire town needs my hot dogs, do I have the right to hostage that town for my profit? I don't get it either. Also if we are the third largest producing oil country, why do we depend on other countries? If our government cannot protect our own resources, why the hell are they there.
Sorry, I cannot answer your question, because I don't get it either.
Well things like this they call capitalism and it runs all democratit societies and most communist nations. Remember most communist nations are run by very few who make all the rules and get most of the money. In a capitalist society like we have here in America you make money to make more money no matter who it hurts but some government oversight needs to be applied there is no reason what so ever a CEO of an oil company should get a 400 mil bonus like the CEO of Occidental Oil got last year that money could have been put to R%26amp;D and lower pricing at the pump but nooooo he gets a huge bonus check and smiles all the way to the bank
Bravo Debra! Could not have said it better myself. Look to the government for most of our problems. The government is the reason our jobs went overseas, will not allow us to drill our own resources, and if we are not careful, they will control our healthcare then we are all in trouble.
Sorry, but your question is pretty dumb. What do you mean why should oil companies be ';allowed';?!?! because it's their product!! they've taken the financial risk.
you're pretty much saying that companies don't have a right to keep the profits from products/services they sell. If businesses weren't allowed to keep their profits, then no one would go into business!
And what does that mean: ';on the backs of working class americans';?!
That's so silly. i am a democrat through %26amp; through, but your remarks are just so goofy.
When you have as much money as big oil, and you have both parties full of corrupt politicians, this situation is inevitable. There is a simple solution- gas in Venezuela sells for 12 cents a gallon- Ours is headed to over $5 a gallon and beyond - why the difference? Chavez nationalized the oil companies and took away the profit motive- We should do the same.
From what I've heard the gas companies get 8 cents per gallon. The government gets a huge amount in taxes something like 40 to 60 cents per gallon. Possibly the taxes on gasoline should be looked at before the oil companies. I just don't see the government helping us out though because they get a lot of money from gas.
if you don't like the cost of fuel... DON'T buy it .. walk use a bicycle. or better yet DRIVE less. its not too difficult to combine errands and trips..
OR BETTER YET ... we can DRILL the oil out of our own country.. you can blame the environmentalist for that.
We have not power to reverse that trend.
they should all be taking over by the government, maybe when obama gets elected.
for the same reason you would if you could
The oil companies are working in a free enterprise system! They are entitled to make a profit. The ogre ';BIG,BAD, oil companies'; only make around 8% profit, which is piddling compared to some of the other corporations in America make, and noone is screaming for the government to make THEM stop!
Like so many others, you are sadly misinformed about the causes of our problems with oil and prices. The real problem starts with the very entity that you are calling on to stop the oil companies!!!
Our government, for various reasons, is not allowing the exploration and production of energy resources here in oown country! In our country we have the resources to become totally energy independent. It is a FACT that we have the oil and the coal necessary to fuel our own country for centuries. But, the companies who can develop these resources for us are not being allowed to do it!
This includes the oil companies, which are ready and willing to drill for crude in Alaska and off the coastlines.
This includes, too, the companies which are ready to mine the coal, which we have in vast amounts, to convert to energy.
If the government takes away, even more from the oil companies profits, the oil companies will have no optio but to decrease exploration and development!
Instead of calling for the government to hogtie the oil companies, call for them to enable these companies to develop our resources and get us out from under the thumbs of other oil-producing nations that hate us!!!!!
Edit; Why do some people keep parroting '; record breaking profits';?
Who are you quoting and who's records are they breaking? Many of the Fortune 500 corps are making hugely greater profits than the oil companies! Do you honestly think that none of that profit comes ';on the backs of working class people?
Edit #2: Double bravo U.A.O.!!!!!!
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