Apple & Samsung capture 103% of handset profits as rivals lose money

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  • Reply 101 of 181
    dasanman69dasanman69 Posts: 12,980member
    solipsismx wrote: »
    Are you going to say you can't have a negative gain or that jumbo shrimp are impossible?

    Yes negative gains don't exist. Shrimps aren't called shrimp because they're small so yes you can have jumbo shrimp. Actually let me reword that. If a lower gain is compared to a higher gain as in quarterly or YoY profits are concerned then yes it's considered a negative gain but it's still a positive gain albeit smaller.
  • Reply 102 of 181

    Quote:

    Originally Posted by Steven N. View Post


    Actually nope.  I have friends that do this type of thing in their day job in Chicago (you know.  The Ph.D. in math types hired by trading firms) and they specifically look at the profits within an industry separately from the losses within the industry. They are modeled uniquely across calculations.



    It depends on what the purpose of analysis is. If your interest is only in looking at the firms with positive net income in an industry, that's exactly what your PhD friends (gee, I am impressed; NOT) should/would do.


     


    But if your unit of analysis is the industry, you would sum up the net incomes across all firms. Go to the industry section of Yahoo Finance and take a look. For example, go to Airlines: http://biz.yahoo.com/ic/770.html, where you'll notice that they report industry profit margin of 2.8%. Next, go to the list of firms in the industry: http://biz.yahoo.com/p/770conameu.html and see if you can figure out where they get the 2.8%.


     


    Here's a better example: How do you think the P/E ratio for, say, the S&P500, or say, that for the Banking or Energy or Telecom sector is calculated? Specifically, how is the denominator calculated?

  • Reply 103 of 181

    Quote:

    Originally Posted by BrianCPA View Post


    Accountant's used P&L statements everyday, which are different from Income Statements. But, only accountants would know that.



    Weird. I am looking at Apple's latest 10Q, and p. 2, which reports "Net income" is titled "Statement of Operations."


     


    Someone had better tell the accountants......

  • Reply 104 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by SolipsismX View Post





    1) You're not using the word in the intended form.



    2) Showing that the word loss specifically means loss does not prove that another word can't also refer to a loss with the proper qualifier is added.



    3) Do a search for negative profit and you'll get an excessive number of comments but I choose one on negative profit margins because it had a video. I though where test failed perhaps a voice might help: ]http://www.ehow.com/video_12221637_profit-margin-negative.html



    4) If you and others want to change the meaning of words, the entire structure of the English language and accounting practices that predate every living person on Earth be my guest but it'll be a hard battle.


     


    Opps.  Profit Margin is a uniquely different thing than profit. Profit margin is base on Net Income and that can, in fact, be negative.  But that is neither here not there.  This is about calculating % profit share and this MUST BE DONE BY ONLY USING THE PROFITS within the sector and companies posting losses MUST BE DISREGARDED.


     


    This is because the base calculation is:


                              Profit Of Company A


    %Profit share = -----------------------------------  * 100%


                                      Total Profit


     


    If you allow the total profit to go to 0 (or even worse, negative) the entire thing simply falls apart.  If the total industry profits within a sector swing to a loss, than companies actually posting a profit could show a %profit share of -50% while companies posting a loss would indicate a 200%.  Likewise, if the actual industry profits get simply small, you could end up with nonsensical numbers like:


     


    Company A: 123,098.01% of the profit


    Company B: 3,323,54.1% of the profit


    Company C: -34,003,234% of the profit


     


    What does that mean and what information does it convey?

  • Reply 105 of 181
    First, the probability that, in the real world, industry profits would total exactly zero is perhaps zero (or close to that). So, it's kind of moot other than in its attempt to be clever.

    Second, I can't speak for jragosta (although I suspect he might agree), but I would VERY comfortably say that the company had more than 100% of the industry profit (= Net Income).

    Let's me also go ahead and preempt your possible rebuttal: some equations give errors at certain values but the equations are still real equations. That's true but we don't apply those equations to the real world. In physics when an equation results in an undefined answer the physicist realizes that the equation is inadequate and a better solution to the problem must be discovered. Thankfully we don't have to wait for that new solution in this case because it's been brought up as the accounting industry's current solution several times already.
  • Reply 106 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by anantksundaram View Post


    It depends on what the purpose of analysis is. If your interest is only in looking at the firms with positive net income in an industry, that's exactly what your PhD friends (gee, I am impressed; NOT) should/would do.


     


    But if your unit of analysis is the industry, you would sum up the net incomes across all firms. Go to the industry section of Yahoo Finance and take a look. For example, go to Airlines: http://biz.yahoo.com/ic/770.html, where you' notice that they report industry profit margin of 2.8%. Next, go to the list of firms in the industry: http://biz.yahoo.com/p/770conameu.html and see if you can figure out where they get the 2.8%.


     


    Here's a better example: How do you think the P/E ratio for, say, the S&P500, or say, that for the Banking or Energy or Telecom sector is calculated? Specifically, how is the denominator calculated?



    Again, profit margin is a uniquely different thing than profit.  Sighh.. You can lead a person to enlightenment but you cannot make them learn.  They have to do that on their own.

  • Reply 107 of 181
    solipsismxsolipsismx Posts: 19,566member
    steven n. wrote: »
    So does this article ( http://arstechnica.com/business/2012/10/amazon-earnings-slip-slightly-in-the-third-quarter/ )  state:

    As I think it should:
    "Amazon posts first loss in four years, LivingSocial investment did poorly"

    Or, as you suggest it should:


    "Amazon posts first negative profit in four years, LivingSocial investment did poorly"

    Shameful! You've completely removed the possibility that there can be more than one correct statement or that words can have synonyms and related concepts by saying that I would choose the latter. Both are correct but one is more clear in the context of a headline? See, the problem (as revealed by the 2nd part of your post) is that you aren't comprehending basic terminology so you think it makes no sense.
    or even one of the two following:
    "Amazon posts first (profit) in four years, LivingSocial investment did poorly"

    "Amazon posts first -profit in four years, LivingSocial investment did poorly"

    Just asking 

    No fucking idea how anyone would ever think the negative sign or parentheses would be for the word profit or income instead of the actual value. :no:
  • Reply 108 of 181

    Quote:

    Originally Posted by wakefinance View Post



    It's neither moot nor clever. It's math and your either with it or against it. If I were you I'd stay on math's side in this.


    If you say it's "neither moot nor clever", I guess it must be so.


     


    Sigh. Just ignore the point about the real world... (if you can find me an industry with exactly zero profits, I'll eat crow; otherwise, you call it quits on this one -- fair?)

  • Reply 109 of 181

    Quote:

    Originally Posted by BrianCPA View Post

    Profit *margin* is the change in profit (change can be positive or negative even though it has the word "profit" before it) given a change in production or some sort of other input.


    Yikes, Mr. Accountant, I've got news for you. "Profit margin" means Net Income (= Profit) ÷ Revenue. (Sometimes people use the $ number instead of the percentage, but the most common usage is in %).


     


    You can look that up in 29.9 million sites in 0.15 seconds.

  • Reply 110 of 181

    Quote:

    Originally Posted by anantksundaram View Post


    Weird. I am looking at Apple's latest 10Q, and p. 2, which reports "Net income" is titled "Statement of Operations."


     


    Someone had better tell the accountants......



     


    I said that P&Ls were different from Income Statements and you took that to mean that "Net Income" and "Statement of Operations" don't exist in the world? You are digging at everything possible for your argument to stay afloat.


     


    I seriously don't get your point here. Because accountants use P&Ls, Apple can't use a "Statement of Operations" or the other way around?

  • Reply 111 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by anantksundaram View Post


    First, the probability that, in the real world, industry profits would total exactly zero is perhaps zero (or close to that). So, it's kind of moot other than in its attempt to be clever.


     


    Second, I can't speak for jragosta (although I suspect he might agree), but I would VERY comfortably say that the company had more than 100% of the industry profit (= Net Income).



    The film industry (as in Fuji-Film, Kodak, Agfa) might disagree with you on that.  Industries come and go all of the time and the math has been very well established to deal with the conditions when industry profits go to zero and show entire losses.


     


    The very fact you would be willing to indicate a % profit share > 100% means I hope never ever ever to work for you or with you on a project.

  • Reply 112 of 181

    Quote:

    Originally Posted by wakefinance View Post



    In physics when an equation results in an undefined answer the physicist realizes that the equation is inadequate ..... etc etc


    Finance is not Physics.


     


    I thought we were discussing the former.

  • Reply 113 of 181

    Quote:

    Originally Posted by anantksundaram View Post


    Yikes, Mr. Accountant, I've got news for you. "Profit margin" means Net Income (= Profit) ÷ Revenue. (Sometimes people use the $ number instead of the percentage, but the most common usage is in %).


     


    You can look that up in 29.9 million sites in 0.15 seconds.



     


    My mistake. Ooops.


     


    I was thinking of "marginal profit", which is the change in profit from producing more units, etc.. I am happy to acknowledge that you are correct and I mispoke.


     


    Regardless though, this article is referencing "Profit", not "Profit Margin", which are two different things, which was my point to begin with: Profit cannot be negative but Profit Margin can.


     


    Thanks

  • Reply 114 of 181

    Quote:

    Originally Posted by Steven N. View Post


    Again, profit margin is a uniquely different thing than profit.  Sighh.. You can lead a person to enlightenment but you cannot make them learn.  They have to do that on their own.



    That's why I gave you a second, as I said, "better" example, where I asked your about a denominator in an industry P/E ratio. Remember that? Sigh.... the question you chose to ignore?

  • Reply 115 of 181
    solipsismxsolipsismx Posts: 19,566member
    briancpa wrote: »
    1. Yes I am
    2. Ok, what "qualifier" am I not reading in this article?
    3. Your link is talking about profit margins, which is not the same as profit. Profit *margin* is the change in profit (change can be positive or negative even though it has the word "profit" before it) given a change in production or some sort of other input.
    4. We do not want to change the meaning of words. In fact, I'm promoting proper English and the proper use of lingo, especially in the sense of accounting. I don't know alot about anothing except for the field that I have studied and worked in extensively. No where in our arguments are we trying to restructure a language.

    1. No.
    2. Negative
    3. I pulled a video to show how a percentage can be below 0% (and above 100%) as it was stated in this thread it was impossible. There are plenty of written articles that will describe negative profits id est losses.
    4. You did when you keep trying to avoid the use of synonyms. But don't take my words for it, here is a microeconomics book that shows you that losses and negative profit are synonyms: http://books.google.com/books?id=xoztFMavGCcC&pg=PA293&lpg=PA293&dq=negative+profit+microeconomics&source=bl&ots=5S3syBP2sr&sig=FZjJR_wx_Pj2VFh3gxaU-LsTEVg&hl=en&sa=X&ei=-cQSUbC1EeibygG7goCgAQ&ved=0CDEQ6AEwAA#v=onepage&q=negative profit microeconomics&f=false
  • Reply 116 of 181
    Finance is not Physics.

    I thought we were discussing the former.

    The point is that equations cannot apply to the real world, physics or accounting, when they give undefined answers.
  • Reply 117 of 181

    Quote:

    Originally Posted by Steven N. View Post


    The very fact you would be willing to indicate a % profit share > 100% means I hope never ever ever to work for you or with you on a project.



    Oh, the probability of that is zero. Don't worry.image

  • Reply 118 of 181

    Quote:

    Originally Posted by wakefinance View Post





    The point is that equations cannot apply to the real world, physics or accounting, when they give undefined answers.


    Ah, tell me then, (after all, your name includes the word 'finance' in it, so I am guessing your interests are somehow related to the field), do P/E ratios apply to the real world? Especially since you argue that E can be zero?

  • Reply 119 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by SolipsismX View Post





    Shameful! You've completely removed the possibility that there can be more than one correct statement or that words can have synonyms and related concepts by saying that I would choose the latter. Both are correct but one is more clear in the context of a headline? See, the problem (as revealed by the 2nd part of your post) is that you aren't comprehending basic terminology so you think it makes no sense.


    Based on the tone of your reply the title was:


     


    "Amazon posts first loss in four years, LivingSocial investment did poorly"  :-)


     


    You say there is more than one way to state it.  Find the article that states it as:


     


    "Amazon posts first negative profit in four years, LivingSocial investment did poorly"


     


    or some similar method.


     


    But at the end of the day, it is flawed beyond belief to calculate % profit share of various companies and include companies posting a loss.  There are too many cases where the math simply falls apart and you end up with numbers that mean nothing.  Long ago, people figured out you avoid that by tracking losses and profits uniquely.  It is a simple concept.  Really, it is.

  • Reply 120 of 181

    Quote:

    Originally Posted by BrianCPA View Post


     


    My mistake. Ooops.


     



    That wasn't your first mistake.

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