Originally Posted by traderumor
Profit margin is expressed in a percentage.
Here's the numbers for Exxon. Net income before taxes as a % of sales was 14% for 2nd Q 2005, as opposed to 13% in 2004. After taxes, 8% both years. So the Feds got their share, I would think that should make everyone happy. That is a fair margin, but by no means is outrageous. It would be the equivalent of making $40,000 on half a million in sales. Would you consider that to be outrageous? Would you be happy with 8% if it were your business?
It's not outrageous in terms of a %, no, but keep in mind these are sales of BILLIONS of dollars. Let's say, for the sake of argument, there were $10 billion in sales during 2Q 2005 (I'm sure it's much higher than that, but this is all play money anyway, right?) That is $800 million profit in one quarter--and, like I said, I'm certain that it's higher than that.
So, it begs the question, what on Earth do these companies need a tax break for? That's what baffles me.