You can talk all you want about the give and take among the various entities that comprise the economy.
But as we ponder today's headlines one that would seem worthwhile to me is "Will Walmart become the next Twinkies?" We have written before about how the inflexibility of union attitudes has resulted in the decline of a number of major industries from airlines, to textiles, to steel, to aluminum, to the post office, to automobile makers, etc.
Here is an approximate set of facts that never appears in the mainstream media, probably because it's above the analytical capability of most media personnel. Walmart did approximately $450 billion dollars of sales in it's latest reported year. Since there are approximately 3.4 billion shares outstanding, each shareholder was entitled to approximately $132 a share of sales for each share that is outstanding.
There is a second part. Walmart had to pay for the items that it sold in its stores and then pay it's almost 2 million employees for all the things they do to run the business. Those cash costs amounted to $423 billion or 94% of the $450 billion dollars of sales, and on a per share basis $124 of the $132 per share of sales to each shareholder. Consequently each outstanding share of Walmart generated income of $8 a share which theoretically and indirectly were assigned to a shareholder.
Now the third part. After paying taxes and capital expenditures, each dollar of sales that Walmart generates it EARNS 1.3 PENNIES. If you added that back into all the expenses, Walmart would have no more money than it currently has to pay for running their business.
We live in a country where the media is allowed to present union leaders and left wing professors claiming that Walmart makes billions of dollars of profits and should give large pay increases to its personnel. As you can see, from the very simplistic analysis above, their comments are destructive, misleading and incorrect. One day the management and shareholders will just walk away and say enough is enough. ONE PENNY, ONE PENNY, ONE PENNY.
If you don't think you are watching the next Twinkies...Wake Up!
But as we ponder today's headlines one that would seem worthwhile to me is "Will Walmart become the next Twinkies?" We have written before about how the inflexibility of union attitudes has resulted in the decline of a number of major industries from airlines, to textiles, to steel, to aluminum, to the post office, to automobile makers, etc.
Here is an approximate set of facts that never appears in the mainstream media, probably because it's above the analytical capability of most media personnel. Walmart did approximately $450 billion dollars of sales in it's latest reported year. Since there are approximately 3.4 billion shares outstanding, each shareholder was entitled to approximately $132 a share of sales for each share that is outstanding.
There is a second part. Walmart had to pay for the items that it sold in its stores and then pay it's almost 2 million employees for all the things they do to run the business. Those cash costs amounted to $423 billion or 94% of the $450 billion dollars of sales, and on a per share basis $124 of the $132 per share of sales to each shareholder. Consequently each outstanding share of Walmart generated income of $8 a share which theoretically and indirectly were assigned to a shareholder.
Now the third part. After paying taxes and capital expenditures, each dollar of sales that Walmart generates it EARNS 1.3 PENNIES. If you added that back into all the expenses, Walmart would have no more money than it currently has to pay for running their business.
We live in a country where the media is allowed to present union leaders and left wing professors claiming that Walmart makes billions of dollars of profits and should give large pay increases to its personnel. As you can see, from the very simplistic analysis above, their comments are destructive, misleading and incorrect. One day the management and shareholders will just walk away and say enough is enough. ONE PENNY, ONE PENNY, ONE PENNY.
If you don't think you are watching the next Twinkies...Wake Up!
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