Monkey with a pin goes for inflation

srcandas

Thrugelmir wrote: »

Profit is what matters not turnover.

Increased profit can be generated by improved efficiency.

But increased profit can be produced by increased turnover without any efficiency process change. Simply a benefit of scale. Or the benefit of the fixed cost aspect of the company not changing.

1. The franchise model is one example of this.
   
2. Selling concept or an abstract product multiple times is another.

And increased turnover by exploiting broader markets may also aid stability and resistance to downturn.

Complex world

Thrugelmir

srcandas wrote: »

Complex world

As the old saying goes. Turnover is vanity, profit is sanity but cash is king.

Strip away the mystic and what's left isn't that complex.

srcandas

Thrugelmir wrote: »

As the old saying goes. Turnover is vanity, profit is sanity but cash is king.

Strip away the mystic and what's left isn't that complex.

But we will have to disagree because IMHO it is complex. If investing was based on cliches any idiot could make millions (and to date I haven't :rotfl:).

Turnover means you have a business with customers. A customer base has value. If you are making an enormous loss of course this is bad but then so is your business model. And you can easily lose loss making turnover.

Profit needs to be good for the levels of investment. I run a company and our one aim is never to make a profit. We are very happy about it

Cash is next to worthless without investment ideas. Plenty of companies are sitting on cash and some can think of nothing better to do with it than to return it to investors.

The old sayings may roll off the tongue but at times they are nonsensicle.

:beer:

Thrugelmir

srcandas wrote: »

Plenty of companies are sitting on cash

In the main global corporates and the cash is held off shore. So a major tax problem to overcome to bring it back on shore.

sabretoothtigger

Its not a problem, if dollars go down and the foreign cash isnt that can lead to share performance. So long as they have business abroad, its a good hedge
The problem is western governments restricting business

Turnover is vanity, profit is sanity but cash is king.

Free cashflow is what makes shareholders rich. It can be returned as dividends or chosen for investment, share buybacks even when its held as plain cash this is a good indication of a company doing well.

Intel is about to issue bonds at a couple percent to buy back shares yielding 5%. Thats really a great idea, it should yield benefits for them, it reduces costs generally they gain from their free cashflow and general good standing which is the opposite of insolvency

Thrugelmir

sabretoothtigger wrote: »

Its not a problem, if dollars go down and the foreign cash isnt that can lead to share performance. So long as they have business abroad, its a good hedge
The problem is western governments restricting business

US companies are holding cash in overseas subsidaries to avoid taxes at home. A well documented issue.

sabretoothtigger

Ive heard of it but most of the DOW is foreign business not USA. It would be unusual if they didnt have more cash abroad.

The USA taxes citizens who live and earn elsewhere in the world. They would do the same to companies if they tried to use this cash in the USA.
It would create a stronger dollar probably and depress prices so I guess the Fed and friends prefer this

In the end they could just move everything abroad and just be quoted in New York, not a problem

srcandas

Tx one and all. All passed on to Pete. Not sure when he will have completed his research and will publish but if it is half as interesting as Monkey then ....................

:beer:

sabretoothtigger

petecomley

SnowMan wrote: »

1. A clear explanation of the relationship between ..............

Many thanks Snowman. It is a very comprehensive list. I think most of them were on mine, but it is good to get another opinion.

Regards
Pete