Sorry, a number divided by zero is not infinity. It is indeterminate (it approaches infinity).
Again, you and 'BrianCPA' keep making the most basic math mistakes, so it's clear that you don't know what you're talking about.
You're right. I should have used “ indeterminate" rather than infinity. Now act like that's what I wrote and argue against my point instead of playing word games.
Sorry, a number divided by zero is not infinity. It is indeterminate (it approaches infinity).
Again, you and 'BrianCPA' keep making the most basic math mistakes, so it's clear that you don't know what you're talking about.
So if they made more profit than the industry as a whole, how is the percentage not over 100%?
Furthermore, I'm still waiting for you to answer my question in post #54. Where did the extra $10 come from if we do it your way?
What amazes me is you have a grasp on the math but not a clue how to apply it.
Here is Nokia's report right from their website. I've linked to the PDF as well as included an annotated screenshot that clearly shows a negative profit and not simple zero as some are saying profit can not be reported as a loss.
Here is Nokia's report right from their website. I've linked to the PDF as well as included an annotated screenshot that clearly shows a negative profit and not simple zero as some are saying profit can not be reported as a loss.
Here is Nokia's report right from their website. I've linked to the PDF as well as included an annotated screenshot that clearly shows a negative profit and not simple zero as some are saying profit can not be reported as a loss.
Here is Nokia's report right from their website. I've linked to the PDF as well as included an annotated screenshot that clearly shows a negative profit and not simple zero as some are saying profit can not be reported as a loss.
Negative profit is profit realized from effective loss prevention. For example, A company introduces a new procedure that reduces loss by 5%. This 5% is actually profit that would not have been. In essence negative profit is when one loses less than it should have lost. Company A was expected to lose $10 million but instead only lost $5 million, it would show a $5 million negative profit.
Yeah they did a cute analysis to come up with the 103% they make is look like Apple and Samsung took money from the companies who lost money. It is absolutely a bad way to look at it, the fact a company lost money does not mean the market had some sort of negative value. I hate when analysis do this crap. it like saying you giving 110% effort. your creating energy you do not have.
Quote:
Originally Posted by jragosta
You've been corrected on this before.
Take a hypothetical market:
Company A $100 profit
Company B $200 profit
Company C $100 loss
The total profits for the industry are $200, not $300. So with the total profits of $200, Company A had 50% of the market's profits and Company B had 100% of market profits.
It works exactly like your taxes. If you have two businesses and one of them earns $1,000 and the other one loses $500, your net reported income would be $500.
Negative profit is profit realized from effective loss prevention. For example, A company introduces a new procedure that reduces loss by 5%. This 5% is actually profit that would not have been. In essence negative profit is when one loses less than it should have lost. Company A was expected to lose $10 million but instead only lost $5 million, it would show a $5 million negative profit.
"Negative Profit" as you are describing it is a different concept.
The concept we are talking about is "profit which happens to be below zero" or "profit which is negative". In fact, "negative profit" in the sense you are using it is not a standard GAAP term and is rather something used mostly by academics and consultants. In 3 decades of business management, I've NEVER seen the term used in the sense that you are using it in this post. I first heard about it when searching for 'negative profit' to find links for this thread.
Several of us have called it "negative profit" which is subject to confusion because the term can be used in both the sense that you are using it here and the sense that every other post in this thread is using it. Either one is correct - and since everyone but you is talking about the same thing, the confusion is minor. And the fact that "negative profit" in the sense that the rest of us are using it IS a GAAP term means that there's absolutely nothing wrong with the way it's being used in this thread.
Just to beat the dead horse, as I understand it the original argument is over two (at least) methods of calculating some ostensibly useful number, whether "value share" (as in the post) or "profit share" or "profit percentage" or what-have-you.
Method A: Take all of the companies involved in selling the widgets. Add up all the money the profitable companies made in profits. Subtract all the money the unprofitable ones lost (or if you prefer, add their negative profits). There is then a pool of money that you can call aggregate profit for the industry. Use this number as the denominator for each company; each company's share is their profit divided by this number.
Method B: Take only the profitable companies. Tally up all of their profits, and use that as the denominator; each company's share is their profit divided by this number.
Sidestepping the question of which is the "right" way or the "industry standard" way, it seems to me that the number produced by Method A yields less useful information than in Method B. If a company has a value of 500% under Method A, it seems impossible to know whether that's good or bad without knowing more about the market as a whole. First, you have to know whether the market was profitable overall - if not, than any positive number is bad. Second, you have to know what all of the other players got. If company A's number is 500% and company B's is 10%, that's fine for company A, but if company A has that same 500% while company B has 15000%, that's less good. In any case, you need more information than the single number provides. Furthermore, it seems very difficult to compare over time - if a wildly incompetent company enters your market, the number could skyrocket - up to a point, and then suddenly flip to a negative as that other company's red ink pulls the overall market into the red.
With Method B on the other hand, you can know right away that if you're at, say, 50%, that's probably pretty good. It's better if that number increases than if it decreases. If you didn't make the cut at all, that's not good. You don't need to know much about the rest of the field to know at a glance how you're doing because you know what the range is (0-100%). Are there things Method A can tell you that Method B cannot? Probably so, but the number you get seems much more straightforward in B.
<p style="margin:0px 0px 0px 0px;line-height:16px;font:13px Arial;">Just to beat the dead horse, as I understand it the original argument is over two (at least) methods of calculating some ostensibly useful number, whether "value share" (as in the post) or "profit share" or "profit percentage" or what-have-you.</p>
<p style="margin:0px 0px 0px 0px;line-height:16px;font:13px Arial;">Method A: Take all of the companies involved in selling the widgets. Add up all the money the profitable companies made in profits. Subtract all the money the unprofitable ones lost (or if you prefer, add their negative profits). There is then a pool of money that you can call aggregate profit for the industry. Use this number as the denominator for each company; each company's share is their profit divided by this number.</p>
<p style="margin:0px 0px 0px 0px;line-height:16px;font:13px Arial;">Method B: Take only the profitable companies. Tally up all of their profits, and use that as the denominator; each company's share is their profit divided by this number.</p>
<p style="margin:0px 0px 0px 0px;line-height:16px;font:13px Arial;">Sidestepping the question of which is the "right" way or the "industry standard" way, it seems to me that the number produced by Method A yields less useful information than in Method B. If a company has a value of 500% under Method A, it seems impossible to know whether that's good or bad without knowing more about the market as a whole. First, you have to know whether the market was profitable overall - if not, than any positive number is bad. Second, you have to know what all of the other players got. If company A's number is 500% and company B's is 10%, that's fine for company A, but if company A has that same 500% while company B has 15000%, that's less good. In any case, you need more information than the single number provides. Furthermore, it seems very difficult to compare over time - if a wildly incompetent company enters your market, the number could skyrocket - up to a point, and then suddenly flip to a negative as that other company's red ink pulls the overall market into the red.</p>
<p style="margin:0px 0px 0px 0px;line-height:16px;font:13px Arial;">With Method B on the other hand, you can know right away that if you're at, say, 50%, that's probably pretty good. It's better if that number increases than if it decreases. If you didn't make the cut at all, that's not good. You don't need to know much about the rest of the field to know at a glance how you're doing because you know what the range is (0-100%). Are there things Method A can tell you that Method B cannot? Probably so, but the number you get seems much more straightforward in B.</p>
Your method is extremely misleading - which is why no one (except for a couple of misguided people here use it).
Look at my post #54, for example, to show why that method is wrong.
If you want to compare yourself to a limited subset of companies, you can, of course, do that. But if you want to compare your company to the market, it only makes sense to consider the WHOLE market, not just the companies you choose to include.
Comments
Says the person claiming that profit can be negative.
What I wouldn't give for your ~/Library/Spelling/LocalDictionary
What amazes me is you have a grasp on the math but not a clue how to apply it.
And, yet, you still haven't responded to post #54 and explained where the extra $10 came from.
It can. I already provided a link. Here's another one:
http://smallbusiness.chron.com/reasons-negative-profit-margin-19358.html
Maybe you should look at Amazon's year-end results. Look at the 'profit' column. Notice the negative number?
Again a profit can be negative when compared to a higher profit, but both are still positive.
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[*] http://www.results.nokia.com/results/Nokia_results2012Q4e.pdf (PDF)
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[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/20188/width/500/height/1000[/IMG]
Simply because there isn't a 'losess' option.
Simply because a separate line for 'loss' would be redundant. By definition, a negative profit is a loss.
It's not there because businesses are not in the business of losing money.
Heh heh. The blowhards here will totally ignore your post.
LOL. This has to be the most embarrassing post in this thread. And that's saying a lot.....
Negative profit is profit realized from effective loss prevention. For example, A company introduces a new procedure that reduces loss by 5%. This 5% is actually profit that would not have been. In essence negative profit is when one loses less than it should have lost. Company A was expected to lose $10 million but instead only lost $5 million, it would show a $5 million negative profit.
Flatterery will get you nowhere lol
Yeah they did a cute analysis to come up with the 103% they make is look like Apple and Samsung took money from the companies who lost money. It is absolutely a bad way to look at it, the fact a company lost money does not mean the market had some sort of negative value. I hate when analysis do this crap. it like saying you giving 110% effort. your creating energy you do not have.
Quote:
Originally Posted by jragosta
You've been corrected on this before.
Take a hypothetical market:
Company A $100 profit
Company B $200 profit
Company C $100 loss
The total profits for the industry are $200, not $300. So with the total profits of $200, Company A had 50% of the market's profits and Company B had 100% of market profits.
It works exactly like your taxes. If you have two businesses and one of them earns $1,000 and the other one loses $500, your net reported income would be $500.
"Negative Profit" as you are describing it is a different concept.
The concept we are talking about is "profit which happens to be below zero" or "profit which is negative". In fact, "negative profit" in the sense you are using it is not a standard GAAP term and is rather something used mostly by academics and consultants. In 3 decades of business management, I've NEVER seen the term used in the sense that you are using it in this post. I first heard about it when searching for 'negative profit' to find links for this thread.
Several of us have called it "negative profit" which is subject to confusion because the term can be used in both the sense that you are using it here and the sense that every other post in this thread is using it. Either one is correct - and since everyone but you is talking about the same thing, the confusion is minor. And the fact that "negative profit" in the sense that the rest of us are using it IS a GAAP term means that there's absolutely nothing wrong with the way it's being used in this thread.
Entertaining thread.
Just to beat the dead horse, as I understand it the original argument is over two (at least) methods of calculating some ostensibly useful number, whether "value share" (as in the post) or "profit share" or "profit percentage" or what-have-you.
Method A: Take all of the companies involved in selling the widgets. Add up all the money the profitable companies made in profits. Subtract all the money the unprofitable ones lost (or if you prefer, add their negative profits). There is then a pool of money that you can call aggregate profit for the industry. Use this number as the denominator for each company; each company's share is their profit divided by this number.
Method B: Take only the profitable companies. Tally up all of their profits, and use that as the denominator; each company's share is their profit divided by this number.
Sidestepping the question of which is the "right" way or the "industry standard" way, it seems to me that the number produced by Method A yields less useful information than in Method B. If a company has a value of 500% under Method A, it seems impossible to know whether that's good or bad without knowing more about the market as a whole. First, you have to know whether the market was profitable overall - if not, than any positive number is bad. Second, you have to know what all of the other players got. If company A's number is 500% and company B's is 10%, that's fine for company A, but if company A has that same 500% while company B has 15000%, that's less good. In any case, you need more information than the single number provides. Furthermore, it seems very difficult to compare over time - if a wildly incompetent company enters your market, the number could skyrocket - up to a point, and then suddenly flip to a negative as that other company's red ink pulls the overall market into the red.
With Method B on the other hand, you can know right away that if you're at, say, 50%, that's probably pretty good. It's better if that number increases than if it decreases. If you didn't make the cut at all, that's not good. You don't need to know much about the rest of the field to know at a glance how you're doing because you know what the range is (0-100%). Are there things Method A can tell you that Method B cannot? Probably so, but the number you get seems much more straightforward in B.
Your method is extremely misleading - which is why no one (except for a couple of misguided people here use it).
Look at my post #54, for example, to show why that method is wrong.
If you want to compare yourself to a limited subset of companies, you can, of course, do that. But if you want to compare your company to the market, it only makes sense to consider the WHOLE market, not just the companies you choose to include.