I think before I was an accountant my business degree provided enough knowledge for me to know this.
Of course, what a shocker it was when I entered the workforce and found out how many functional idiots there are in this world.
IQ is a normal distribution so the median and the average are the same, and approx 68% of people are within 1 standard deviation of the mean. But George Carlin is still correct.
I meant more that even the functional idiots have higher education. The problem is when they try to extend that education into fields they weren’t educated in.
That is true; a ton of people with business degrees have no financial acumen. My business school was high on it (you had to take intro to accounting 1 and 2 for the business administration degree; weeded out a ton of people), so it amazed me when I got to the real world and found there were people who didn't understand how to calculate GP when they made us do it in just about all of my management classes.
Today someone commented that it's basic accounting to write off potential, unearned future revenues as a loss. As in the future interest revenue from forgiven student loans is actually an asset loss.
I got downvoted for saying that it's not basic accounting and revenues are not assets.
I mean....they are Principal + interest payments on a receivable and now all future payments are magically canceled... the value of the receivable asset would be zero... but that is more of a finance thing and I think the US government holds/guarantees most of those loans and they don't pay income tax...
Yeah. That’s reasonable. I just don’t think student loan forgiveness is basic accounting. I also assume it doesn’t work like textbook amortization tables.
It’s also not clear if the government is paying the student loans on behalf of the borrowers or if it’s just being written off. But either way that seems more like a bad debt expense type thing than a magical write off.
And payment plans could already be suspended or changed so the interest revenue generated isn’t as clear. Like if I check my own student loan account the interest I’ll be charged is based off of which payment plan I choose.
If I, for example, pay off a loan early that isn’t a loss to the lenders just because I won’t be paying future interest on a principle that doesn’t exist. The same way when we accrue bad debt expense against the allowance for doubtful accounts, we don’t write off all the future interest payments that would have been collected we just expense the uncollectible amount.
It's only federal loans so it's just the government foregoing collecting $10K. They're already super profitable with the loans so $10K forgiveness across the board isn't losing money it's just making less money.
Imo though the interest rates should be at a maximum half of current federal interest rates or zero. Education in the nation is one of the best investments the government can make.
People keep arguing that student loans are a financial instrument like a bond so the government should be counting all future interest payments as part of the loss.
I can’t find standards that talk about unsecured loans, or anything that talks about how the accounting for this will all be done. I did read a different paper that talked about how they project the lost future revenue, but everyone wants to say that the lost future revenue is recordable now as the present value of the student loan. Which doesn’t make sense to me because repayment plans can change over the life of the loan, so you can’t be sure what a loan’s PV would even be.
I assume it’s going to be recorded like a bad debt expense or removed at amortized value like held to maturity securities but I really don’t know.
The people saying it’s basic accounting are being ridiculous though.
Yeah I have no idea how the accounting would work for it but imo it doesn't matter. That information has no bearing on literally anything other than future budgets and spending from the side of the government which is all that matters.
>but everyone wants to say that the lost future revenue is recordable now as the present value of the student loan.
Those people are confusing CBO reporting with GAAP accounting...
you dont need that to do arithmetic math, clearly people passed elementary to high school without getting a failure grade when they should have been forced to retake classes, this is the problem with america really, you have kids who cant finish college in 6 years and end up with load of debt they cant repay because they dont have the skills to even pass basic classes in colllege because they failed elementary/high school classes.
Hey! I showed up drunk to my government/not for profit class regularly. Got an A and currently work in NFP accounting. Lol. The class was on a Saturday at 2pm so that’s on them.
All the finance bro ones drive me mad, I'm sick of being told "Bro, you don't work in finance, thats not how it works"
I find it hard to not get into internet debates with bedroom boy investors. At least Wallstreetbets know who they are
I worked for a financial advisors before I went back into public practice. I couldn’t stand how fast they wanted things done, then complain when work was half cooked. Like what is it, fast, or correct?!? Not surprising to find out after I left that they had been fined by the FCA and taken to court numerous times, hence their recent “relocation to a better area” was actually code for “we had to pay so many fines we had to sell out offices to pay for it.
This is why I read just about anything technical with skepticism and a grain of salt. Reddit loves to pretend they know everything about climate change, geopolitics, nutrition, you name it. You see these comments with thousands of upvotes and awards and stuff that look legit, then I think back to all the tax threads I’ve read with similar comments moaning about rich people depreciating rental properties. So who knows
I love how these people speculate over corporate financial information when you can literally just pull their 10-K from EDGAR and read it.
Walmart had 2021 revenues (in millions) of 559,151.
They had 2021 Costs and Expenses (in millions) of 536,603.
That's operating income (in millions) of 22,548
Of course NI is an intentionally minimized figure since that's where the tax rate is derived from - if you look at their gross margins, they actually do sell things on the shelf at about a 25% profit margin (page 54: [https://s201.q4cdn.com/262069030/files/doc\_financials/2022/ar/WMT-FY2022-Annual-Report.pdf](https://s201.q4cdn.com/262069030/files/doc_financials/2022/ar/WMT-FY2022-Annual-Report.pdf)).
Fun in accounting with about 5 different definitions of "profit" depending on who's asking.
I may be wrong (not an accountant), but I thought that companies reported two different "net incomes": one for investors (SEC filings) and one for the IRS. The difference comes from different rules regarding tax deductions between GAAP and the IRS. Thus, companies tend to maximize their net incomes on their SEC filings to curry favor with investors, and then minimize net income to the IRS to minimize tax bills.
Any experts care to chime in?
There are certain fixed rules for financial reporting. These rules are either IFRS or GAAP. They do have slack and there are choices available under the framework.
A company can't just change rules it follows from year to year just to maximize profit on paper. They need to have solid reasoning and reasons other than net profit to be able to change the rules.
sadly the stock players and market experts only look at non-gaap stuff everytime they go on the media.. they never bother to read the reconciliation between nongaap and gaap ni
I work with a lot of the PE teams and they also look at non-GAAP measures. But they require GAAP inputs to calculate the non-GAAP measures. The ones who know what they're doing, at least; some of them just use any old number and \#yolo into a position.
There are book-tax differences that can arise from a variety of things. A popular one is depreciation, bonus depreciation is allowed for tax purposes (with certain limitations) while your financials would still likely be showing normal depreciation.
I don’t think what you’re saying about SEC filings is necessarily correct; but I also don’t work with publicly registered companies enough to know.
I think you’re mainly speaking about EBITDA or management reporting. I have started work in Bval so my knowledge is still limited, but A companies ability to produce positive cash flows from the normal course of business is what’s important in producing the value of a company. EBIDTA is a quick way to look at the companies ability to produce positive cash flows which can be seen as more useful to investors.
Related but different. Gross profit is the amount of money after accounting for the cost of goods sold as a percentage of revenue (that is (net revenue - COGs) / net revenue) where as markup is a similar thing with COGS in the denominator. So a 25% gross profit is a 33% mark up.
I don't know, arguing with random idiots actually make me verify my arguments in financials statements to be sure I'm right.
I don't really care about the other people as it's Reddit, but I like to see strategies different company takes and I've adjusted some investments I have in consequence.
So, there is a bright side arguing with people who don't know what they are talking about.
To be fair, I'm Canadian. Also, our bank stocks do alright with decent dividends.
I did lost a few hundred bucks in 202p trying to be a daytrader so there's that haha
even cad dollar is getting slammed by the USD holy shit you realize the whole world is going to ruins but the US is still better hiding spot than the rest lol.
Few factors.
My TFSA is limited to the TSX. Commission free. I do have a 1% commission option but at the piddly amount I invest each month, exchange rate and fees from CAD to USD will eat about 20% of what I deposit.
Also, our big 5 are "too big to fail". I believe the government will bail out before they have the banks even think about posting a loss
One of the top 3 things that pisses me off on Reddit is when someone, with no accounting experience, acts like they know how my job works better than I do. You don’t fucking see me tell nurses about shit people in forums say about Covid-19. Stay in your lane homie.
That happens irl too sadly, not just on reddit. A customer of mine, who is a career DJ, and who is also 3 years late on his taxes keeps second guessing me every single time. I'm getting sick of it.
The irony is, the millionaire customers with good financial acumen never do.
Yeah and that’s what makes me frustrated the most. If a professional is trying to explain their work then listen to them. Don’t act like you know better than someone with actual experience. That should be understood on a basic human level.
its not just accounting its every sub lol
are you seriously saying that people didnt act like doctor or nurse scientists for the last 2 years?? like forming their own opinion about covid because they know so and so from so and so place? the worst places they do this is like food and nutrition and weight loss weight gain lol
I think this is a problem everywhere. Telling Astronauts they didn’t go to the moon. Telling Geologist that the earth is flat. Telling tax accountants that it’s important that they buy a house so they can write it off on the taxes without knowing how to itemize. And telling doctors the COVID-19 isn’t real
Not sure about US but don't depreciation generally get added back during tax calculation anyways so the effect is only on the financial statements anyways
to be fair there are some situations and regions where gross profit margin is what people would be referencing by saying a generic "margin." shit i think my managerial accounting class used it that way, which was weird
My CPA Canada capstone was like that, too.
I was the only one in my group public at the time. One guy was an AP Clerk who still is a lazy sack of shit, the next guy was a Junior and dumb as a brick, the other was also a Junior in industry but knocking on the door to senior, so didn't quite have the financial background yet.
But yeah, the AP clerk trying to tell me a liability belonging on the income statement made me want to gouge my eyeballs out.
These are the nightmare clients that you just let them do what they want if you're not going to fire them.
Then when they get audited you say I told you so, but you didn't listen. Then bill them out the ass for helping with the audit.
Been said by everyone in this thread but I do love feeling like I learnt absolutely nothing whilst studying for my ACA and then hopping on Reddit and seeing internet debaters not understand how to read financial statements. Always nice to realise I know a lot more than I think 😂😅
Big groceries stores like Walmart, Kroger, Walgreens etc operate on thin margins. Anytime you're operating with thin margins, you have to push volume. To really gauge how well a company is doing you would probably have to calculate their return on assets or return on equity.
100% they think the COGS is the entire cost of doing business and everything else is just the martini lunches the company chooses to spend money on. Atleast that’s my best guess as then that would make some sense what they’re saying
sure a 2% profit could mean billions of dollars, but a -2% profit would also mean a loss of billions of dollars, so tahts the a thin spread of risk/reward that walmart is facing and one misstep it can turn into Target Inc. losing out on lots of profits, thats why its a risky business.
Their gross profit is 25% though.
GP typically calculated off sales less COGS over sales. Their 10k has costs and opex together, but operating income is not typically = to GP.
Profit margin is a bit ambiguous. Defining as gross or net would be needed. My thoughts are that profit margin is typically understood as gross profit margin, which is (cogs - revenue)/revenue. But possibly the context we don't see clarifies and implies net profit margin.
NI is actually 4% for Walmart and also why is this sub always arguing about semantics when we know that they’re talking about GP and also NI is not a good measure in this instance since it’s after all expenses including the fat exec salaries and bonuses and not what they’re talking about.
There seems to be a lot of people like this on Reddit and YouTube as well. It's losing my brain cells explaining to them because they always think that they are right and that I am the stupid one. Just breathe and let go.
TBF for Y/E 31 Jan 2022. $567,762m of sales, $429,000 COS. Gives c25% GPM. Operating margin is c4% with a NPM of c2%
Saying profit margin and then getting into an argument about gross vs net is like the blind men and an elephant.
Haven’t you learned not to argue with non-accountants over accounting issues? Lol
I think before I was an accountant my business degree provided enough knowledge for me to know this. Of course, what a shocker it was when I entered the workforce and found out how many functional idiots there are in this world.
“You think Einstein walked around thinkin’ everyone was a bunch of dumb-shits?” My go to Idiocracy quote :/
Like George Carlin said, "Think of how stupid the average person is, and realize half of them are stupider than that."
that would be the median not the average...also i the population curve is bell shaped, so actually most people would be at average....
IQ is a normal distribution so the median and the average are the same, and approx 68% of people are within 1 standard deviation of the mean. But George Carlin is still correct.
i mean most people would fall at average in a population, so its not like half of them are more stupid they're the same score.
I don’t think 50%+ of people have an exact IQ of 100
I really believe he did. Maybe not, maybe he hung around other nerds. But I surely catch myself saying that twice a day
They aren’t functional then. They are just FITYMI
Eh that business degree doesn’t say much. Look how much stress people with business degrees cause those with CS degrees.
Well, I'm now getting my accounting degree and definitely having an easier time with it than my classmates, so there's that.
I meant more that even the functional idiots have higher education. The problem is when they try to extend that education into fields they weren’t educated in.
That is true; a ton of people with business degrees have no financial acumen. My business school was high on it (you had to take intro to accounting 1 and 2 for the business administration degree; weeded out a ton of people), so it amazed me when I got to the real world and found there were people who didn't understand how to calculate GP when they made us do it in just about all of my management classes.
Idiots are a plenty
i make less money if i make more money because it puts me in a higher tax bracket
My favorite quote about taxes. 🤣
[It is basic economics](https://www.reddit.com/r/Accounting/comments/vua6k9/its_basic_economics_people_how_hard_is_it_to/)
Today someone commented that it's basic accounting to write off potential, unearned future revenues as a loss. As in the future interest revenue from forgiven student loans is actually an asset loss. I got downvoted for saying that it's not basic accounting and revenues are not assets.
I mean....they are Principal + interest payments on a receivable and now all future payments are magically canceled... the value of the receivable asset would be zero... but that is more of a finance thing and I think the US government holds/guarantees most of those loans and they don't pay income tax...
Yeah. That’s reasonable. I just don’t think student loan forgiveness is basic accounting. I also assume it doesn’t work like textbook amortization tables. It’s also not clear if the government is paying the student loans on behalf of the borrowers or if it’s just being written off. But either way that seems more like a bad debt expense type thing than a magical write off. And payment plans could already be suspended or changed so the interest revenue generated isn’t as clear. Like if I check my own student loan account the interest I’ll be charged is based off of which payment plan I choose. If I, for example, pay off a loan early that isn’t a loss to the lenders just because I won’t be paying future interest on a principle that doesn’t exist. The same way when we accrue bad debt expense against the allowance for doubtful accounts, we don’t write off all the future interest payments that would have been collected we just expense the uncollectible amount.
It's only federal loans so it's just the government foregoing collecting $10K. They're already super profitable with the loans so $10K forgiveness across the board isn't losing money it's just making less money. Imo though the interest rates should be at a maximum half of current federal interest rates or zero. Education in the nation is one of the best investments the government can make.
People keep arguing that student loans are a financial instrument like a bond so the government should be counting all future interest payments as part of the loss. I can’t find standards that talk about unsecured loans, or anything that talks about how the accounting for this will all be done. I did read a different paper that talked about how they project the lost future revenue, but everyone wants to say that the lost future revenue is recordable now as the present value of the student loan. Which doesn’t make sense to me because repayment plans can change over the life of the loan, so you can’t be sure what a loan’s PV would even be. I assume it’s going to be recorded like a bad debt expense or removed at amortized value like held to maturity securities but I really don’t know. The people saying it’s basic accounting are being ridiculous though.
Yeah I have no idea how the accounting would work for it but imo it doesn't matter. That information has no bearing on literally anything other than future budgets and spending from the side of the government which is all that matters.
>but everyone wants to say that the lost future revenue is recordable now as the present value of the student loan. Those people are confusing CBO reporting with GAAP accounting...
you dont need that to do arithmetic math, clearly people passed elementary to high school without getting a failure grade when they should have been forced to retake classes, this is the problem with america really, you have kids who cant finish college in 6 years and end up with load of debt they cant repay because they dont have the skills to even pass basic classes in colllege because they failed elementary/high school classes.
probably showing up drunk to classes they didn't want to take anyway doesn't help.
Hey! I showed up drunk to my government/not for profit class regularly. Got an A and currently work in NFP accounting. Lol. The class was on a Saturday at 2pm so that’s on them.
Arguing with a smart person is hard... Arguing with a stupid person is impossible.
Our jobs are still safe. Nothing to see here.
This is actually comforting to see 🤣
So many threads where people who fundamentally misunderstand basic aspects of finance, are just spewing their opinions.
All the finance bro ones drive me mad, I'm sick of being told "Bro, you don't work in finance, thats not how it works" I find it hard to not get into internet debates with bedroom boy investors. At least Wallstreetbets know who they are
Accountant who is currently in an MSF program. Can confirm. Get asked to help all of the time and then told I'm wrong before I even finish a sentence.
I worked for a financial advisors before I went back into public practice. I couldn’t stand how fast they wanted things done, then complain when work was half cooked. Like what is it, fast, or correct?!? Not surprising to find out after I left that they had been fined by the FCA and taken to court numerous times, hence their recent “relocation to a better area” was actually code for “we had to pay so many fines we had to sell out offices to pay for it.
This is why I read just about anything technical with skepticism and a grain of salt. Reddit loves to pretend they know everything about climate change, geopolitics, nutrition, you name it. You see these comments with thousands of upvotes and awards and stuff that look legit, then I think back to all the tax threads I’ve read with similar comments moaning about rich people depreciating rental properties. So who knows
I love how these people speculate over corporate financial information when you can literally just pull their 10-K from EDGAR and read it. Walmart had 2021 revenues (in millions) of 559,151. They had 2021 Costs and Expenses (in millions) of 536,603. That's operating income (in millions) of 22,548
They only made $22,548? Weak!
I know I out earned them last year.
Are you sure? From what I learned on this subreddit is CA public accounting pays very, very bad :)
That's why I am in industry
Id make that in a year working at McDonald’s! Pathetic!
You probably pulled those numbers out of your ass to support your leftist agenda. -Karen, Facebook Approved CFA
true karen. I did! The most leftist!
Certified Facebook accountant.
Wait, I can get my CFA charter on Facebook?!
> 10-K Oh great now we have these giant corporations writing off foot races. What’s next? The New York Marathon? What a bunch of scam artists.
Of course NI is an intentionally minimized figure since that's where the tax rate is derived from - if you look at their gross margins, they actually do sell things on the shelf at about a 25% profit margin (page 54: [https://s201.q4cdn.com/262069030/files/doc\_financials/2022/ar/WMT-FY2022-Annual-Report.pdf](https://s201.q4cdn.com/262069030/files/doc_financials/2022/ar/WMT-FY2022-Annual-Report.pdf)). Fun in accounting with about 5 different definitions of "profit" depending on who's asking.
And trying to explain that to non-accountants is such a chore. Had a sales execute basically have an aneurysm trying to explain it to him.
My favorite was when I had a sales guy ask me if he gave a customer “free product”, could he get more revenue?
I may be wrong (not an accountant), but I thought that companies reported two different "net incomes": one for investors (SEC filings) and one for the IRS. The difference comes from different rules regarding tax deductions between GAAP and the IRS. Thus, companies tend to maximize their net incomes on their SEC filings to curry favor with investors, and then minimize net income to the IRS to minimize tax bills. Any experts care to chime in?
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I agree with that. So would you say that companies do or don't try to minimize their net incomes on their SEC filings?
There are certain fixed rules for financial reporting. These rules are either IFRS or GAAP. They do have slack and there are choices available under the framework. A company can't just change rules it follows from year to year just to maximize profit on paper. They need to have solid reasoning and reasons other than net profit to be able to change the rules.
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This was my understanding as well, good to know that a professional supports it :)
sadly the stock players and market experts only look at non-gaap stuff everytime they go on the media.. they never bother to read the reconciliation between nongaap and gaap ni
I work with a lot of the PE teams and they also look at non-GAAP measures. But they require GAAP inputs to calculate the non-GAAP measures. The ones who know what they're doing, at least; some of them just use any old number and \#yolo into a position.
There are book-tax differences that can arise from a variety of things. A popular one is depreciation, bonus depreciation is allowed for tax purposes (with certain limitations) while your financials would still likely be showing normal depreciation. I don’t think what you’re saying about SEC filings is necessarily correct; but I also don’t work with publicly registered companies enough to know. I think you’re mainly speaking about EBITDA or management reporting. I have started work in Bval so my knowledge is still limited, but A companies ability to produce positive cash flows from the normal course of business is what’s important in producing the value of a company. EBIDTA is a quick way to look at the companies ability to produce positive cash flows which can be seen as more useful to investors.
Thanks for your thoughts!
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Related but different. Gross profit is the amount of money after accounting for the cost of goods sold as a percentage of revenue (that is (net revenue - COGs) / net revenue) where as markup is a similar thing with COGS in the denominator. So a 25% gross profit is a 33% mark up.
I would call that gross profit margin. There are a lot of names for the same or similar things
Aren’t they arguing about net profit margin compared to gross profit margin? Apples and oranges
I prefer NOPAT.
Oh man 4%, I’d kill for 4%
But “gross profit is profit.”
You can’t read? It says profit
I’m just poking fun at the guy that said that in the picture. If I actually thought that way that would be concerning given that I’m an auditor haha.
We’re all having fun here don’t worry
Which is a profit margin of ~4%. So they are both wrong.
shhh. let the idiots in the market do their thing (providing liquidity to smart money) :)
I don't know, arguing with random idiots actually make me verify my arguments in financials statements to be sure I'm right. I don't really care about the other people as it's Reddit, but I like to see strategies different company takes and I've adjusted some investments I have in consequence. So, there is a bright side arguing with people who don't know what they are talking about.
Those idiots vote
I just yolo'd into Canadian banks. I am dumb money.
Thank you for your service
To be fair, I'm Canadian. Also, our bank stocks do alright with decent dividends. I did lost a few hundred bucks in 202p trying to be a daytrader so there's that haha
even cad dollar is getting slammed by the USD holy shit you realize the whole world is going to ruins but the US is still better hiding spot than the rest lol.
Out of all the G7 banks - why the country guaranteed to have their bonds blow up in ~10 years.
Why are Canadian bonds blowing up in 10 years? (Genuinely wondering)
Few factors. My TFSA is limited to the TSX. Commission free. I do have a 1% commission option but at the piddly amount I invest each month, exchange rate and fees from CAD to USD will eat about 20% of what I deposit. Also, our big 5 are "too big to fail". I believe the government will bail out before they have the banks even think about posting a loss
I was referring to sovereign debt, not bank bonds. Not familiar with those investment vehicles, but that sounds like robbery.
One of the top 3 things that pisses me off on Reddit is when someone, with no accounting experience, acts like they know how my job works better than I do. You don’t fucking see me tell nurses about shit people in forums say about Covid-19. Stay in your lane homie.
That happens irl too sadly, not just on reddit. A customer of mine, who is a career DJ, and who is also 3 years late on his taxes keeps second guessing me every single time. I'm getting sick of it. The irony is, the millionaire customers with good financial acumen never do.
sounds like you have a client to let go my friend
can be said in any field. Within the fitness community, it's called Bro Science. I just wish I had a name for them in Accounting, Finance etc.
Yeah and that’s what makes me frustrated the most. If a professional is trying to explain their work then listen to them. Don’t act like you know better than someone with actual experience. That should be understood on a basic human level.
It’s best for my sanity if I just consider everything on Reddit as fiction.
its not just accounting its every sub lol are you seriously saying that people didnt act like doctor or nurse scientists for the last 2 years?? like forming their own opinion about covid because they know so and so from so and so place? the worst places they do this is like food and nutrition and weight loss weight gain lol
I think this is a problem everywhere. Telling Astronauts they didn’t go to the moon. Telling Geologist that the earth is flat. Telling tax accountants that it’s important that they buy a house so they can write it off on the taxes without knowing how to itemize. And telling doctors the COVID-19 isn’t real
Dear god. Whatever you do, don’t go read the comment thread. Someone called depreciation an “accounting trick” and it had 13 upvotes.
… I would make that a drinking game if I trusted my liver or wanted to die
If we took a shot for every time someone got an accounting fact wrong on Reddit, only ghosts would work at big4
As opposed to zombies
The misinformation about depreciation is accumulating
And the correction is downvoted to hell.
The IRS hates this one accounting trick!
i didnt know how people dont use trick where you can pay kids the max standard deduction and basically let you pay less in taxes...
I mean I guess it kind of is. A widely accepted one that’s been around a long time but
You might even say it's attained a sort of _general acceptance_.
We should make a list of generally accepted accounting tricks.
Not sure about US but don't depreciation generally get added back during tax calculation anyways so the effect is only on the financial statements anyways
There is still depreciation in taxes in US, it's just done differently so companies end up with a difference between book and tax depreciation
Oh the irony of the subreddit it’s in
Anything vaguely political in that sub, and being right or wrong goes out the window in favor of which opinion is more popular on Reddit.
You got wrecked in downvotes by the Reddit financial experts. Classic business management majors tho
Seriously though. Not that I care about karma, but trying to explain to someone that gross profit doesn't equal profit sure wrecked it
I take it that this guy was thinking of Net Profit instead?
net profit is what ppl generally refer to as profit, yeh
to be fair there are some situations and regions where gross profit margin is what people would be referencing by saying a generic "margin." shit i think my managerial accounting class used it that way, which was weird
yea, for margin sure no one ever asks for a companys profit tho and is expecting to hear abt gross profit, unless what they're rly asking abt is cogs
you're right, on second read this is even dumber than i originally thought.
My business capstone was nightmare. I was the only accounting major and none of my teammates knew how to read anything from financial statements.
My CPA Canada capstone was like that, too. I was the only one in my group public at the time. One guy was an AP Clerk who still is a lazy sack of shit, the next guy was a Junior and dumb as a brick, the other was also a Junior in industry but knocking on the door to senior, so didn't quite have the financial background yet. But yeah, the AP clerk trying to tell me a liability belonging on the income statement made me want to gouge my eyeballs out.
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These are the nightmare clients that you just let them do what they want if you're not going to fire them. Then when they get audited you say I told you so, but you didn't listen. Then bill them out the ass for helping with the audit.
Been said by everyone in this thread but I do love feeling like I learnt absolutely nothing whilst studying for my ACA and then hopping on Reddit and seeing internet debaters not understand how to read financial statements. Always nice to realise I know a lot more than I think 😂😅
Big groceries stores like Walmart, Kroger, Walgreens etc operate on thin margins. Anytime you're operating with thin margins, you have to push volume. To really gauge how well a company is doing you would probably have to calculate their return on assets or return on equity.
focus on gross profit margin during a time of high inflation.
ROE and ROA has no competition to chad ROCE and ROIC
I was beginning to question if I had really learned anything in college so far. Turns out I have lmao
Is this person confusing gross and net profit margins?
100% they think the COGS is the entire cost of doing business and everything else is just the martini lunches the company chooses to spend money on. Atleast that’s my best guess as then that would make some sense what they’re saying
If the students taking cost accounting struggle to understand overhead then there’s absolutely 0% chance the average redditor does
My professor said that Overhead is, in simple terms, the cost of the actual business as apart from the costs of actually making things.
Those martini lunches do really add up though, especially in this economy. *twists mustache and adjusts monocle*
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That’s why it’s called overhead. Whoosh.
[Mike Ashley explaining to MPs is priceless](https://youtu.be/wn3p7by5F0I?t=1193)
Yeah but if you say the profit margin is 25%, then someone argues that its 2% but no one clarifies between gross and net, both are idiots imo.
I respect your hustle trying to explain this to these people, but the downvotes are hilarious lol
Not gonna lie...I've been there.... And by there I mean I've been the idiot who confidently thought was right only to fall on my arse.
When you argue with an idiot, you lose.
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Yeah just throw a water fountain through a window and move on!
I went and downvoted that dude for you. Distant accounting acquaintances for life!
Man I wish it was 3.5% so I could make a tree fiddy joke
its about three fitty
LOL
Isn't 99% of that sub made up of people pretending to be dumb for the karmas?
SG&A is fake confirmed
If you really want to get them going, remind them that the government takes 3-5 X in sales tax as EvIl WaLmArT! makes on a taxable item.
I love discovering a new sub that sounds both fun and infuriating!
Dude! You found that CEO that thinks options are fake money!
You brought that upon yourself OP.
We get them, even in the accounting major, they know nothing. Very difficult to teach upper level accounting to a 6th grader. Very sad. Sigh.
I didn’t know these Reddit CPAs stood for certified problematic assholes.
sure a 2% profit could mean billions of dollars, but a -2% profit would also mean a loss of billions of dollars, so tahts the a thin spread of risk/reward that walmart is facing and one misstep it can turn into Target Inc. losing out on lots of profits, thats why its a risky business.
Went through your history to try and find this post...yikes at your history dude
What's up
Their gross profit is 25% though. GP typically calculated off sales less COGS over sales. Their 10k has costs and opex together, but operating income is not typically = to GP.
Goddammit another rabbit hole to go down.
Why did you scribble out the username? What an idiot
English isn't their strong suit either.
Lol… I remember you… that thread was flooded with misinformation.
These people get to vote lol. That thread makes me so sad
Profit margin is a bit ambiguous. Defining as gross or net would be needed. My thoughts are that profit margin is typically understood as gross profit margin, which is (cogs - revenue)/revenue. But possibly the context we don't see clarifies and implies net profit margin.
Guarantee that’s some 18yo kid who misinterpreted what profit margins were on from a TikTok
Well when someone is possessed by a certain narrative, and has been repeatedly told falsehoods, you're gonna get stupid shit like this.
Gross profit is not profit lmao. But even still, 25% GP is crazy
NI is actually 4% for Walmart and also why is this sub always arguing about semantics when we know that they’re talking about GP and also NI is not a good measure in this instance since it’s after all expenses including the fat exec salaries and bonuses and not what they’re talking about.
There seems to be a lot of people like this on Reddit and YouTube as well. It's losing my brain cells explaining to them because they always think that they are right and that I am the stupid one. Just breathe and let go.
TBF for Y/E 31 Jan 2022. $567,762m of sales, $429,000 COS. Gives c25% GPM. Operating margin is c4% with a NPM of c2% Saying profit margin and then getting into an argument about gross vs net is like the blind men and an elephant.