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Shadowtirs t1_j9f08i2 wrote

I think what's funny/interesting here is despite the visual, in reality 20 billion dollars is a substantial and incredible amount of money.

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IncomeStatementGuy OP t1_j9f0ooa wrote

Agree - their net income looks even tinier in the visual because it's just 2% of revenue.

But its 11 billion dollars.

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Achillies2heel t1_j9f5c18 wrote

Welcome to traditional retail... Terrible margins. Walmart is huge though. Perspective

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surmatt t1_j9ieezh wrote

Kinda blows me away how high their COGS is. Every retailer I sell to aims for 40% gross margin.

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Dracovius1988 t1_j9iglg2 wrote

Walmarts business model is to run prices suicidally low and strong-arm the competition with volume.

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EssaySimple5581 t1_j9maxkj wrote

Also there is alot of operation cost that they profit from through subsidiaries. This chart is desgned to make it look like it makes less money than it actually does

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Shadowtirs t1_j9f103x wrote

Yeah I just saw that too funny enough. Even still though, 11 billion dollars I mean even with just conservative investment compound interest alone would generate such wealth. And this is off one year.

The amounts of money is so staggering.

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csjerk t1_j9hmawe wrote

That amount of money, invested, would generate incredible wealth _because_ you would be putting it in stocks of companies like this.

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IamaRead t1_j9f2eg8 wrote

5% operating profit are nothing to shun.

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svn380 t1_j9f49zw wrote

  • dividends are paid out of net profits, so that doesn't change the $11 billion figure

  • $30+ million salary for someone running a machine that makes $11 Billion in a bad year.....as a shareholder, would you vote for that?

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IamaRead t1_j9f5qmd wrote

As shareholder (not of Walmart) I voted against all pay increases for CEOs and alike when I could.

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MrMitchWeaver t1_j9fqm4i wrote

I'm more surprised that they only have about a 2% net profit margin

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oby100 t1_j9gh3mr wrote

That’s how Walmart annihilated mom and pop shops. Low margin times massive scale still equals massive profits, but no small shop can possibly operate on such low margins.

The real tragedy is when a Walmart kills all the small stores, but then the location closes for not being profitable enough

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bolteon593 t1_j9ihplu wrote

That pretty irrelevant… making a lot of money is pointless if you’ve only made it by the skin of your teeth.

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fromcjoe123 t1_j9gb1s9 wrote

Today 14 year olds on Reddit learn that retail has paper thin margins and that taxes are paid on earnings not revenue.

I swear we need an intro to economics, finance, and accounting class mandatory in high school in the country. The financial illiteracy on Reddit is absolutely astounding given how many hot takes are about these things.

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Halfwise2 t1_j9gerax wrote

And now I'm thinking of how people pay taxes on personal "revenue" instead of on earnings.

Imagine if we didn't have to pay taxes until cost of living was taken out... rent, food, gas, car payments.... Life has operating expenses.

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MandolinSuperstar t1_j9gfyub wrote

We don't. It's called a standard deduction.

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Halfwise2 t1_j9glas9 wrote

Standard deduction for a single filer is a little under $14K... that doesn't even cover rent in a lot of places.

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cooldaniel6 t1_j9gqvux wrote

Create 2 million jobs and pay 6 billion in taxes and Uncle Sam will give you the same benefits

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Halfwise2 t1_j9h2xfo wrote

Can the 2 million jobs I create also pay only minimum wage and despite offering full time, still somehow not not be enough for food, rent, and medicine and other necessities to live?

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cooldaniel6 t1_j9idnug wrote

If people take them, yeah 🤷🏾‍♂️

−1

fromcjoe123 t1_j9hjrb6 wrote

I mean if you're 1099 you can literally do this.

The argument that W2 cannot benefit from this is that all other expenses are not related to generating your direct economic benefit and are discretionary or not related to your employment. If you are a business, your costs also make someone else revenue and then their earnings are taxed. Likewise, the shareholders of the business then pay their own taxes incremental to the business on any distributions or cash or their ultimate disposal of assets.

That being said, the government at the federal and state level do give you a variety of incremental deductions around costs they think have additional economic value like homeownership, children, and education.

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xXxPLUMPTATERSxXx t1_j9hie4b wrote

Let's be honest. Redditors aren't going to "learn" anything from this. Everyone reading this will be back in some other post tomorrow complaining how inflation isn't real because it's all Walmart profits.

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m199 t1_j9itglu wrote

Amen. Perhaps squeeze in a quick lesson too on where to find America on a map while you're at it

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BlissCore t1_j9gdivj wrote

What are you referring to? Who are you criticizing?

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fromcjoe123 t1_j9hizui wrote

Literally the vast majority of posts and comments regarding economic or financial concepts period outside of dedicated subs to them and even then (I'm looking at you r/Economics) people can be shocking unknowledgeable.

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BlissCore t1_j9hlwbf wrote

You're still being vague about what or who you're referring to. Which takes?

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metisdesigns t1_j9hszhm wrote

Have you read the comments on the post you're replying to?

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BlissCore t1_j9htmf3 wrote

Oh it's MY fault for not knowing what their vague references are to.

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metisdesigns t1_j9hu8u0 wrote

First day on reddit is it? Welcome.

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BlissCore t1_j9huien wrote

No actually I've dealt with stupid fucking assholes like you who can't answer a simple goddamn question for nearly 6 years.

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metisdesigns t1_j9hv9lg wrote

Well, since you're so civil and friendly, I'll explain.

If you actually took the time to read the comments from other people, and not just fixate on your entitlement to be spoon fed information, and had maybe passed even high school economics you would see that there are a lot of folks who dont understand how these things work, and are more than willing to spout innane things that make as much sense as playing chess with an asocial pigeon.

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BlissCore t1_j9hwoue wrote

I literally asked which specific takes were they talking about? How am I supposed to guess what opinions this guy judges as "uneducated"? Who exactly is misunderstanding economics and what are they misunderstanding about it? What exact opinions are you irritated by? Like you bitches just circle jerk over vague animosity toward people you can't even articulate and I'm just supposed to know who you're talking about. So enlighten me, what are the popular opinions about economics on Reddit?

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metisdesigns t1_j9hybfy wrote

You want specifics on the ~50M active daily reddit users as a breakdown of exactly which accounts seem to not understand economics? But object to generalizations, and then ask for them?

edit - Huh, that's clever and kinda sad. Ask for more info and then block the person so they can't reply.

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BlissCore t1_j9hytlz wrote

Are you fucking braindead? I asked for what exact opinions are you so irritated with? Generalizing is fine, but either choose people you're irritated with or opinions. You can't just say "I don't like how everyone on Reddit is so uneducated on this incredibly broad field of knowledge but I won't articulate how or why they're uneducated or even what opinions are actually being held."

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daveed4445 t1_j9ftp9v wrote

$611 billion of revenue to $11 billion of profit. Why investors love tech so much and hate mature industries like retail

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Deto t1_j9gdq93 wrote

It also looks extremely fragile. If the cost of sales goes up just a little faster than then revenue then BAM, all profit gone.

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TypicalCraft7 t1_j9hgnid wrote

That's not how it works at all. If costs go up, guess who pays? You do. It doesn't come out for their bottom line unless demand drops.

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Deto t1_j9hv2i7 wrote

Not all goods have inelastic demand. Costs going up means people will buy less.

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TypicalCraft7 t1_j9igy75 wrote

It's Walmart. Most of their products have relatively inelastic demand in that the are low cost consumer goods.

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Deto t1_j9ihlp3 wrote

I mean, if your suggesting that Walmart could raise prices and make more profit then why aren't they doing that already? Like if the price right now is X, then the only reason it's not X+.50c is that they've determined they would sell less at the higher price point - enough less to not offset the increased profit.

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TypicalCraft7 t1_j9ihtb1 wrote

They can't do that because they have competition who would charge less.

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drapparappa t1_j9i4xex wrote

I guess nobody has been paying attention to inflation

0

LanchestersLaw t1_j9hk5h1 wrote

Walmart is the biggest purchaser of many goods which puts it as the counterpart to a monopoly; a monopsony (single purchaser instead of single producer).

Walmart has incredible negotiating power, when there is a price shock Walmart forces its suppliers to take the hit with the threat of never buying from them again; which it can do. One of the efficiencies of Walmart’s economy of scale is that it pays below market rate for most of its goods because of bull purchase efficiencies and negotiation power.

https://www.econ.ucdavis.edu/events/papers/1014JustinCWiltshire_JMP.pdf

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Real_Jackraps t1_j9hdiz2 wrote

Only if you have absolutely no idea what you're talking about.

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incraved t1_j9hgf01 wrote

I feel like they probably factor that into their business model somehow

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nobecauselogic t1_j9ichyp wrote

  • Mature industry doesn’t always mean low margin.

  • Low margin doesn’t always mean low return.

  • Tech doesn’t always mean high margin.

  • Tech doesn’t always mean high return.

  • “Investors” like returns above the market average. S&P 500 5-year total return is about 45%. WMT 5-year total return is about 76%.

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fulanita_de_tal t1_j9f6s51 wrote

I’d love to see a chart like this for pharmaceutical giants.

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IncomeStatementGuy OP t1_j9f89bj wrote

I made one for Johnson & Johnson a couple of weeks ago. It's online here.

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jettison_m t1_j9fm8mq wrote

Ooh do Pfizer

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fulanita_de_tal t1_j9hz07s wrote

Lol my thoughts exactly. I wanna see Pfizer and Eli Lily and those other big guys that rely almost entirely on prescription drugs and not OTC like J&J, and I wanna see revenue broken out by US vs international.

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Oliv9504 t1_j9i7095 wrote

Around the same ~18% profit from total sales

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GameDoesntStop t1_j9f1xvl wrote

Another way to look at it. On average, for every $ spent there, approximately:

  • 76¢ went to the supplier of the good

  • 21¢ went to other costs (wages, utilities, etc.)

  • 1¢ went to corporate income taxes

  • 3¢ went to Wal-Mart finances

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HulaguIncarnate t1_j9gyao5 wrote

Those add up to 101

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Riffz t1_j9h3s6z wrote

Super man scheme. You take a fraction of a dollar and put it in your own bank account. Just don’t miss a decimal, Michael.

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Theforgottendwarf t1_j9hp015 wrote

What about sales tax? Does the govt make more than Walmart does?

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Scorpions99 t1_j9i14vy wrote

I dunno about sales tax, but the US government "makes" as much currency as it wants to through the Treasury, Fed, and banks (who also own the Fed.) They could make as much as one could want...they just don't want to...all at once anyways. It is a train wreck in slow motion with debt/GDP levels reaching levels only a person ignorant or in denial could be content with. Sure, the government does provide services. Just ask an old-timer if the food industry should regulate itself entirely. Otherwise, the government doesn't make or produce goods in any substantial fraction relative to services and contracts funded by their infinite amount of currency.

Plenty of hate to be had for Wal-Mart, but more useful to understand how we got here, why here is difficult to change, and the difference between price and value, currency and money, and so on.

To OPs beautiful-ish data, a more helpful visualization might be the cascade of taxes collected by the US and appropriated into goods and services paid to employees of $100b+ market cap companies that don't provide enough compensation for such essential-for-staying-alive goods and services.

Gotta stop this rant. Cheers.

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Theforgottendwarf t1_j9jp9qd wrote

I think you missed the point. In most places sales tax is around 8%. Walmart makes 3%. The govt makes money by you shopping at Walmart, instead of at mom and pops that are far harder to tax properly.

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goodluckonyourexams t1_j9jzyup wrote

>The govt makes money by you shopping at Walmart, instead of at mom and pops that are far harder to tax properly.

uh what

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Theforgottendwarf t1_j9m747o wrote

For every $1.00 you spend at Walmart you pay $0.075 generally in sales tax. Mom and pops, small businesses historically hide some transactions as cash. As well Walmart hires a great mix of skilled/unskilled labor which helps boost the local economies. This is why local/state governments “sponsor” walmart, giving them great subsidies and have no issues with employees on welfare. Because they know many of those employees wouldn’t make it elsewhere.

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Noctudeit t1_j9fac51 wrote

Everything is relative. Walmart making $11B is different than the mom & pop shop making $11B. For some context, for every dollar you spend at Walmart the company keeps only 1.8 cents. The rest goes to pay for goods, facilities, staff, taxes, etc. Plus, much of the net profit is retained for future growth, and any dividends paid out are divided among hundreds of millions of investors.

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IncomeStatementGuy OP t1_j9eyng5 wrote

Data source: Walmart's SEC filing

Tool used to create the visualization: SankeyArt (I am developing this tool)

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wijwijwij t1_ja80690 wrote

It bothers me that the two biggest gray areas "swell" in the middle rather than being constant height to match the vertical bars. Maybe using constant height creates other visual problems, so your thickness is perpendicular to the path of each swoosh?

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IncomeStatementGuy OP t1_ja80zkz wrote

I agree, bothers me too :D

It’s something I try to avoid somewhat when I create the diagram by controlling overall flow height and node positions on the canvas. I have not thought about it in terms of making changes to the algorithm until you mentioned it.

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metisdesigns t1_j9eypuk wrote

Huh, they made more in profit than their employees take in on welfare. I guess they could afford to pay at least welfare level wages.

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IncomeStatementGuy OP t1_j9eywzo wrote

What is the minimum wage they pay?

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metisdesigns t1_j9ezypp wrote

As of last month they claim $14/hr (depends on location) but historically their employees take in something like $6B in direct assistance, not including subsidized programs.

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Ahab_Ali t1_j9f13sq wrote

Walmart has over 2.2 million employees, of which between 14,500 and 25,000 receive SNAP, Medicaid, or state welfare program assistance.

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metisdesigns t1_j9f270n wrote

Wow, so about 1% of their staff are on direct assistance? That's a lot of folks they're letting down.

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BigEOD t1_j9f7d5d wrote

Before you get too upset, did you know about 24% of all enlisted military are on welfare programs because the government doesn’t pay them enough?

Wal mart looks More generous than the government many would argue should be regulating this by percentage and pure numbers. And the government takes in way more money than Walmart. It would take over 100 times the annual profits Walmart makes to pay just the defense budget, and they pay people that little.

Source: https://www.thecentersquare.com/national/u-s-army-recommends-food-stamps-for-soldiers-struggling-with-inflation/article_34e15302-3048-11ed-9730-97264b6694d5.html

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metisdesigns t1_j9favsz wrote

I did. Do you usually use red herrings or are you a fan of making falicous arguments in general?

Did you know that center square is a rebranding of watchdog.org and affiliated with the state policy networks and is tied to anti-tax policies that have advocated for cutting military and social policy benefits?

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pale_blue_dots t1_j9fi7hz wrote

"These two things are bad, so we should just equivocate and throw our hands in the air and give up!"

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Pyro_Light t1_j9fp3xw wrote

One has a blank checkbook and the other is a few bad years away to having to fire millions of people… interesting how peoples minds work… The funny part is that no one seems to give a shit about is every time Walmart raised their minimum wage they close a ton of stores…

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goodluckonyourexams t1_j9k04p1 wrote

you think anti-tax policies that advocate for cutting military are bad?

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BigEOD t1_j9p0d07 wrote

No, I think they could cut military spending by a 1/4 to 1/3 if congress got rid of the ridiculous rules governing procurement. I manage a sizable budget of govt money and the way I have to go about contracting to get things done adds 15-30% based on what it is.

If they got rid of stupid rules and let us do our procurement like a normal business (at the unit level at least) we could save billions easy.

It’s hard to have nuanced conversations with someone who has opinions but zero knowledge, can’t have a real talk if it’s all nuts broad strokes don’t you think?

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goodluckonyourexams t1_j9p2s7w wrote

corruption might add 15-30% without procurement

I was more about the fact that military doesn't create value

what's a nut broad stroke?

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BigEOD t1_j9q2seq wrote

Fat fingered, not sure where the nut thing comes into play.

I can’t speak to high level corruption, but at the low levels we are so audited and so controlled everything is proper. If they just allowed us to do things differently at the low level we could save billions.

And if you think the military is zero value, you should tell Ukraine that. Or Europe for that matter, as the Ukraine war has greatly impacted energy prices and the world economy.

And saying no one should have a military is about as stupid as saying no one should have a gun. Your tree correct that if there was no violence we wouldn’t need the means to do it, but people are violent so we need the means to protect ourselves and our interests.

Also many daily technology things you use, like the internet we are having this discussion on, was invented either by or for the military. Even LCD screens were invented by a military scientist in his spare time, I got to meet him once.

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goodluckonyourexams t1_j9q4hor wrote

If audits really solve the issues procurements try to solve without additional costs, then sure, sucks how ineffcient everything is.

Ah you know, I know what a military is. Imagine there was only one country, then any military spending would be a waste.

>Also many daily technology things you use, like the internet we are having this discussion on, was invented either by or for the military.

blabla, that's a stupid af argument

Like imagine the R&D 800 billion could give.

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BigEOD t1_j9q5cs5 wrote

Oh ok, thank you for the very pointed and substantial argument against how many things you enjoy were borne of military spending.

Also the audits don’t cost money, it’s the rules we follow so that contractors (usually those evil big businesses I know you hate) get to charge 20-30% more because of those dumb rules.

I do construction management, and have many friends in the industry that do both govt and commercial. A good example is a 7.5 ton package HVAC unit. Outside world would pay 12-16k to hook it up to a building, while I was quoted 24k and 34k by different firms. Imagine that happening tens of thousands of times across the govt, not just the military and that’s the best place to start with reducing our govt budget.

In your perfect world with one govt how would that happen? You’d need a military to conquer all the people you’d like to have a benevolent world govt for and none will go without fighting for their sovereignty. So that idea is ridiculous and unrealistic.

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goodluckonyourexams t1_j9qhjsd wrote

It is a substantial argument. Military spending for civil research progress is super inefficient.

audits literally cost money but I wasn't trying to say that their cost increase would surpass the savings

yeah I believed you already and 2x/3x for a common thing is crazy

Wouldn't say ridiculous since we could have it. It's just a hypothetical scenario to explain something. Obviously we would gain all military expenses if military wasn't necessary because wars are possible. If military was only about defense of own country, USA could drop all except nuking capabilities.

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BigEOD t1_j9ozxbq wrote

I find it funny how people on Reddit love to attack business and want to govt to regulate them, but they do the exact same thing.

My red herring points out the govt you think should protect people actually predates on them the exact same way business do. They won’t help because they don’t want to.

But pick apart what you think I mean instead of what I actually mean, you can win that argument. Too bad it’s not the one I am making.

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Tommyblockhead20 t1_j9ggc9x wrote

Is worth noting that about half their workforce is part time. It’s one thing if it’s a full time employee of theirs on assistance, but if it’s someone that works there like 1 day week, that’s kinda different.

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Theforgottendwarf t1_j9hp75e wrote

How much does the state take in in Sales Tax. Welfare is just them kicking back sales tax profits.

−1

metisdesigns t1_j9htgrl wrote

Sunshine, most "welfare" is federal tax dollars, and there isn't a federal sales tax.

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boiledpeen t1_j9gw2ix wrote

honestly this feels like how much trillion dollar companies should be making. if every company made these margins and put that money into salaries and improving the company we would have a significantly better country

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Greddituser t1_j9gvjip wrote

Nice visualization. Can you do one for Chevron?

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dethblud t1_j9g2xc6 wrote

It would be interesting to see this split between online and brick and mortar.

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IncomeStatementGuy OP t1_j9g6e9q wrote

Agree, not sure if they report that though.

Which one do you think is more profitable?

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HurriCa1n t1_j9ienr9 wrote

I just posted this in another comment actually lol

“ I was apart of the e-commerce supply chain. They actually lose more in online sales than in store. Brick and mortar is what they thrive on. I may be recalling the quote incorrectly but, an American (on average) is no more than 6 miles away from a Walmart or Sam's Club. It’s actually kinda creepy when you think about it.”

As for the breakdown of the split, I’m not sure. I do know that most e-commerce warehouses are not profitable for the first 3 years. They use a model similar to amazon where the expansion plan is to have a warehouse in an area that covers parts of a state. I know California has most of them in So-Cal with one or two in Nor-Cal. It also depends on what type of facility it is. The shipping for large items such as bbqs and tvs vs small items like toys and personal items is what will determine the length of the timeline to profitability. If it’s a hybrid building it’s a crapshoot and all bets are off.

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minorthreatmikey t1_j9h7h98 wrote

I feel like that would be extremely stressful. To have over 600 bil in revenue but only have 11 bil in profit. Don’t get me wrong, 11 billion is a lot of money but only 1.8% of the revenue 😅

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Appropriate-Youth-29 t1_j9hgk25 wrote

I would love to connect sometime if you’re interested. I do some comparison of retail groups in the hardware channel. If interested DM me and we could compare notes sometime.

Their EBITA is remarkably close to a lot of independent hardware stores, but for all different reasons, I’m sure.

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nobecauselogic t1_j9joax2 wrote

Curious about the use of that metric. Why not use EBITDA? I would guess that an independent retailer has more depreciation cost than amortization, or maybe it’s uneven across the sector and this evens it out? Just curious.

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wolfofremus t1_j9j5e8m wrote

So there is a reduction in net profit, and the record high in revenue is just due to inflation as the cost of operation is also record high.

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cooldaniel6 t1_j9gqn6t wrote

Need to pay more taxes though, any profit is bad /s

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Wolffir t1_j9h1hwx wrote

I would love to know what the costs of sales and operating expenses are divided up in.

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Oliv9504 t1_j9i6v8b wrote

Dmn, all that job and operations for ~18% of profit sounds like a bad deal but it just the shear amount of sales that make it up, I mean I wouldn’t turned down 11B but, I you were the “owner” would instead invest in other less risky business that maybe pay less but has less operations?

1

HurriCa1n t1_j9idci4 wrote

I was apart of the e-commerce supply chain. They actually lose more in online sales than in store. Brick and mortar is what they thrive on. I may be recalling the quote incorrectly but, an American (on average) is no more than 6 miles away from a Walmart or Sam's Club. It’s actually kinda creepy when you think about it.

1

CreepySquirrel6 t1_j9ioe52 wrote

11B profit on 421B revenue seems extremely skinny. Is 3% normal in retail?

People say netflix are screwed and they have a 30% margin.

1

The8Homunculus t1_j9iutg4 wrote

Can you break down the operating expenses part further? See how much goes to the employee pay versus power bills? I'm curious to see upper-level management salary cost versus electricity cost

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IncomeStatementGuy OP t1_j9ivjz7 wrote

Unfortunately they seem to not be break it down further. At least I didn’t see it when going through the earnings report.

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Painty_The_Pirate t1_j9j3mgg wrote

Uh oh, those revenue streams aren’t outpacing inflation >_>

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SolidTicket5114 t1_j9j4xa0 wrote

How do you make charts like this? Is there an easy straight forward way to do it in office 365 / Power BI?

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IncomeStatementGuy OP t1_j9j66h7 wrote

I create them with SankeyArt, a tool I am developing. It has a spreadsheet input so you can prepare the data for the flow definition in Excel and then copy everything into SankeyArt.

I have never worked with Power BI. Does Power BI have integrations with other software? Maybe we can build a SankeyArt integration.

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hooray4horus t1_j9h40go wrote

I thought Walmart didn’t pay taxes

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cdx70 t1_j9f3o57 wrote

This shouldn't annoy me but please, cost of goods sold not cost of sales

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IncomeStatementGuy OP t1_j9f8gz2 wrote

Walmart officially reports it as "costs of sales" in its earning release

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cdx70 t1_j9f8rpu wrote

I wonder if that means they calculate wages into that number or some other expenses, I was assuming it was just the actually cost of the goods but I guess that doesn't make sense because revenue should be way higher than that number, like over double

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codybevans t1_j9gaykn wrote

Cost of sales does not include wages or overhead. Only purchases.

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Keystone-12 t1_j9fah8n wrote

Wal Mart has always used "Cost of Sales" over GOGS.

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PointyWombat t1_j9fufg0 wrote

Looks like creative accounting to me...

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codybevans t1_j9ghm6y wrote

Tell me you don’t work in the the industry and have never looked at a P/L without telling me you don’t work in the industry and have never looked at a P/L.

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PointyWombat t1_j9gkyvn wrote

You're absolutely right.. I have no idea what I'm talking about here. I guess I just expected a larger net profit percentage that what is illustrated here.

−1

codybevans t1_j9gulj9 wrote

Typical net margins in the industry are about 1-2%. But that’s not ever really talked about because $20 billion profit sounds way better when people are referencing corporate greed. Nobody realizes how hard it is to even pull razor thin margins. Or the risk it takes to put that kind of money into a business in the hope you can make those margins. My store will do about 10 million In sales this year. The net profit will probably be right at 100,000. A 1% increase in wages and we are no longer profitable without increasing prices. It’s a balancing game where you have to be looking to cut costs anywhere you can while still being competitive in the job market.

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PointyWombat t1_j9ik369 wrote

This is enlightening. Thanks for sharing. I had no idea margins were actually as thin as that. Also, when you say 'the industry', are you referring to retail in general for consumer goods?

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codybevans t1_j9rgvh4 wrote

No worries. Most people don’t know because they’ve never needed to. And most of my experience is in retail and specifically grocery. Some sectors of retail do have higher margins. Home improvement, and some apparel companies for example. But I am not well versed enough in their operations to know a lot about them.

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debunk_this_12 t1_j9go370 wrote

Man where do I start. First it’s called cogs not cost of sales, secondly it’s not gross profit and operating profit… it’s operating income and gross income… secondly it’s operating income is your operating revenue -operating expenses. Ebitda = operating income-overhead, gross income = ebitda-depreciation. Net income = gross- taxes.

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cooldaniel6 t1_j9gqg6h wrote

OP pulled the terms and data from Walmarts own earnings report.

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debunk_this_12 t1_j9gvcjx wrote

It’s not gaap. Period. It doesn’t show u how much money a company actually makes. Period.

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codybevans t1_j9gvcoz wrote

I mean, yea this is what your typical Econ class calls it but I’ve seen it called a few different things in different businesses. The chain I work for calls it Gross Margin and Net Margin. We also use cost of sales. Typically restaurants I’ve managed call it COGS.

Edit: Nitpicking something as small as “cost of sales” vs. “cost of goods sold” is pretty pedantic.

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IncomeStatementGuy OP t1_j9gyjph wrote

I went with "cost of sales" as this is what Walmart calls the line in their SEC filing.

And I used the terms "gross profit", "operating profit" and "net profit" for consistency (consistently "profit"). Accounting has synonyms and that's ok.

I tend to get worried if companies report any "adjusted" metrics.

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codybevans t1_j9gyufk wrote

That’s totally understandable. The numbers mean the same thing. I appreciate you taking time to make these. They’re really insightful.

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snake99899 t1_j9fueae wrote

How is it they have total revenue of $611B but pay only $6B in taxes?! 1%…

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Obvious_Chapter2082 t1_j9gcch5 wrote

Their tax is on profit, which was $20 billion

Also, the $6 billion is their income tax expense, which isn’t the same thing as the income tax they actually pay

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BrushNovel9003 t1_j9flz3l wrote

This is what they WANT YOU TO SEE. $11 billion over $600 billion gross turnover is a very risky, pencil thin profit. I feel sure they hare hiding some facts somewhere. Most of these companies make at least 6% nett profit.

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codybevans t1_j9gbfdw wrote

I don’t know where you’re getting 6% from but I have never seen a retailer in this market pull 6%. I manage a medium sized chain and we run about 2%. Target pulls about 3%. Kroger pulls about 1.5. Walmart is usually around 2%. I’m very familiar with P/L’s in this industry and this all seems right.

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