And why are they so cash rich?
It doesn 't make sense.
And why are they so cash rich?
It doesn 't make sense.
They fired the worst workers with the recession, cutting labor costs. Minimal drop in production.
The most successful companies are either growing despite the economy (eg Apple) or improving margin by cutting expenses and not investing things like new hiring or capital expenditures. Many companies are not going to hire new employees or otherwise invest until they believe there are growth opportunities.
It's because most "created" jobs are totally unnecessary. If a big company lets go half their employees, everything still gets done. Lots of large companies with people wandering around killing time. Most small companies too.
Good morning!
I studied accounting heavily and if you can read their reports like an accountant, you will see that most of those top companies are not so cash rich and they do their darndest to make themselves look as good as they can for stock investing purposes. You can't look at their revenues and make that determination. Dig into the liabilities, the type and length of notes, and look at their accounts payable. accounts payable is what their customers owe the company but aren't paying because people can't pay their bills. I did a pitch in front of Dominion Power executives about that very topic. Even Google's growth rate has decreased, but tech companies are one of the securest industries in the U.S. economy because tech is the U.S's competitive advantage. We produce tech products better than other countries, and other countries produce stuff like corn better than us, so they make the corn and we make the iPhone and trade.
First, TOP companies are exceptional by definition.
Big companies with lots of capital and established earnings are better able to withstand tax and regulatory burdens than smaller businesses.
In some instances, big companies enjoy privileged relationships with government regulators and are able to gain legal advantages over their less well-connected competitors.
Then the economic ignoramuses blame the problems on the free market, call for more taxes and regulations and make things worse.
The top companies are the top companies for a reason, and of course they should have high profits. They have better products and services that people are willing and able to purchase. Most companies though (the 98% the media does not write about) are hurting along with everyone else.
They are cash rich because they don't waste money on non-productive employees, and because they are keeping the cash offshore, where the government cannot confiscate 34% of profits each year. When we stop taxing corporations at 34%, you will see that cash come back and more people will be hired.
It makes perfect sense. I will try to sum this up... when credit has become a problem, and credit has only become EASIER to get, companies appear to doing well.
We went over the 'cliff' a long time ago.
Many corporations have the bulk of their cash in offshore accounts. They cannot use these funds domestically without incurring taxes. They can use the funds for out-of-CONUS investment, which is a lot of what is going on. Most have outright stated that if the Fed would impose a tax "holiday", then they would use those funds back here. I used to work for Amgen, who has billions offshore. Was laid off from an oncology research position in Seattle, along with about half of my department in October of 2011. It was a bummer but I don't believe for a minute that these corporations will bring any of this money back into the U.S.
Tim L. wrote:
I don't believe for a minute that these corporations will bring any of this money back into the U.S.
They will if we repeal taxes.
There is nothing wrong with the economy. It is steadily getting better but most (especially the negative media) are too stupid to realize it.
There are signs everywhere if you look.
The transfer pricing game. Put your intangible assets in low tax countries, charge a royalty to the operations of the high tax countries. Wait till a repat. holiday. It's a race to the bottom. Of course we want the American taxpayer to pay to keep order in the world via our military and fight for intellectual property rights in the World courts. Lower the top federal to 28% from 35%, eliminate loopholes to make it revenue neutral, and don't give in to the territorial tax argument.
There is a big difference between the "economy" (meaning some measure of economic conditions for the entire population) and the economics of the major players in the "economy". By any reasonable measure, the "top companies" are all monopolies that are assured profitability regardless of the overall health of the broader economy. Companies like ExxonMobil, Walmart, ConAgra, Bank of America, etc. can simply adjust their workforce to match the demand and be profitable. They only need minor tweaks in their business model to sustain profitability as they are without any real competitors.
Arwen wrote:
and look at their accounts payable. accounts payable is what their customers owe the company but aren't paying because people can't pay their bills.
Evidenced multiple times in your post, you don't know d*ck about accounting. The line I quoted is probably my favorite example of this.
MFCPA wrote:
Arwen wrote:and look at their accounts payable. accounts payable is what their customers owe the company but aren't paying because people can't pay their bills.
Evidenced multiple times in your post, you don't know d*ck about accounting. The line I quoted is probably my favorite example of this.
yeah, this is pretty amazing. i wonder what the bigwigs at dominion power thought of his presentation.
Yeah, this line was my favorite:Arguments can be made that you have this backwards to a certain degree.
Arwen wrote:
...and other countries produce stuff like corn better than us, so they make the corn and we make the iPhone and trade.
Carnivore 69 wrote:
The top companies are the top companies for a reason, and of course they should have high profits. They have better products and services that people are willing and able to purchase. Most companies though (the 98% the media does not write about) are hurting along with everyone else.
They are cash rich because they don't waste money on non-productive employees, and because they are keeping the cash offshore, where the government cannot confiscate 34% of profits each year. When we stop taxing corporations at 34%, you will see that cash come back and more people will be hired.
corp. tax isnt 34% for all business you know... corp tax rate is similar to individual, in that it is progressive. For example, the more profit you make the higher your corp tax bracket. Therefore, not all corporation pays 34% tax...
Exactly and unfortunately the laws of capitalism are circumvented. The top profit company paid 2% in taxes, received government subsides and spent huge amounts in lobbying costs. They funded conservative think tanks to convince the population that unions hurt America and to limit government monitoring that might reduce profit margin.
Precious Roy wrote:
There is a big difference between the "economy" (meaning some measure of economic conditions for the entire population) and the economics of the major players in the "economy". By any reasonable measure, the "top companies" are all monopolies that are assured profitability regardless of the overall health of the broader economy. Companies like ExxonMobil, Walmart, ConAgra, Bank of America, etc. can simply adjust their workforce to match the demand and be profitable. They only need minor tweaks in their business model to sustain profitability as they are without any real competitors.
Because they employ robots instead of people.
If you want to make a big profit, buy a robot and put it to work. A robot is a legal slave.
top Obama contributors like GE & Google are doing great because they're taking advantage of fat cat tax loopholes that barry will not be closing - despite his rhetoric about how he's all about helping the middle class..