...

JH>>This is totally clueless. It doesn't require a whole lot of education
JH>>in math or accounting to realize that 365 days, or 52 weeks, or 12
JH>>months, or 4 quarters of profits at 3% of revenues results in a
JH>>yearly profit of 3% of revenues, not some multiple thereof.  The
JH>>inventory turnover period is irrelevant to calculations at this
JH>>level.

 JB> That is some creative financing.  Good thing they don't
 JB> compute compound our taxes this way.

 Do you pay your taxes every week? Every month?

 Yes, if you have an investment of $1000, and you turn that
 investment over 52 times a year, at a profit of 3% per
 turnover, then your profit on investment is about 365%.

JH>>Per the most recent "This week in Petroleum" report from the EIA,
JH>>current US petroleum industry stocks are about 21 days supply of
JH>>crude oil and 22 days supply of finished gasoline.  This dolt seems
JH>>to be trying to tell us that if the industry were to cut its stocks
JH>>in half, thus halving the inventory turnover time, they could double
JH>>their profits.

 JB> Maybe if they doubled their production capacity but not
 JB> this way.

 If they turned their inventory over twice as fast, with half the
 money invested in inventory, their profit on investment would
 increase 4 times, if the profit on turnover stayed the same.

 However, total dollar profit would not change.

 JB> Well done.  I agree that this one is right up there near
 JB> the top of the most ignorant economic posts of the year.

 Yours most certainly is.

BOB KLAHN bob.klahn{at}sev.org   http://home.toltbbs.com/bobklahn

... Those who think government is never the answer ask the wrong questions.
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