But it is not uncommon for an industry in disruption to show minimal or even no profits (losses outweigh profits). So under this flawed math, you could end up with whacky numbers like company A getting 1290% profit, company B getting 3543% of the profit
Or even worse:
Company A getting -254% of the profit.
To avoid these issues, you have profit and losses. Not just profit. It is not a hard concept to grasp.
You're partly right. On the Balance Sheet (the other part of a P&L) your profits and losses taken together have to sum to 100% (or, more correctly, a zero sum). This is why the "profits" side alone add up to 103%. It hasn't got the losses side added in yet.
That's accounting for ya! If you take only one side or the other of the ledger, you might end up with exactly those 'wacky numbers'...
That is not valid in the slightest bit. If another company has a loss, then it's zero profits, not negative profits.
Trying to follow this artcle....so lets say samsung spends 1 billion dollars to produce tablets. Unable to sell them, trade them in, or give them away. they take billion dollar loss or neg 100% profit. Apple spends 1 billion dollars to produce ipads. Sell all they can make. Lets see.....that means Apple earned 200% of the profit. Got it! but wait...wouldnt that also mean if samsung sold all they could make that they both would individually earn 100% of their share. Very interesting.........
Neither is the concept of a + (plus) or a ? (minus).
But one way the math gives consistent, reasonable and easy to understand numbers with the other way giving ambiguous, wierd and internally inconsistent numbers. I will take the former instead of the click bait second way.
Trying to follow this artcle....so lets say samsung spends 1 billion dollars to produce tablets. Unable to sell them, trade them in, or give them away. they take billion dollar loss or neg 100% profit. Apple spends 1 billion dollars to produce ipads. Sell all they can make. Lets see.....that means Apple earned 200% of the profit. Got it! but wait...wouldnt that also mean if samsung sold all they could make that they both would individually earn 100% of their share. Very interesting.........
Not quite. By the warped math of this article, Samsung would approach -infinity% of the profits and Apple would approach +infinity% of the profits. I say approach because your example has 0 profits and you get a divide by zero indeterminate value.
Trying to follow this artcle....so lets say samsung spends 1 billion dollars to produce tablets. Unable to sell them, trade them in, or give them away. they take billion dollar loss or neg 100% profit. Apple spends 1 billion dollars to produce ipads. Sell all they can make. Lets see.....that means Apple earned 200% of the profit. Got it! but wait...wouldnt that also mean if samsung sold all they could make that they both would individually earn 100% of their share. Very interesting.........
This makes no sense. Negative percentages are used primarily for a drop in a percentage.
Instead of having the exact same argument as the last time we had 103% profits in the industry, could someone find that thread and link to it?
I agree with TS! That way all the arguments relating to whether 103% of industry profits is possible will be available in 200% of the threads related to that topic.
You addressed neither the example nor my question, and instead just introduced a different example where an undefined result is the correct and reasonable answer, since, by definition, a change from zero to any finite number is an undefined fractional increase.
Firstly we were not talking about fractional derivatives (changes), we were talking about one quantity as a fraction of another which, third grade math notwithstanding, is different, and secondly, this method for representing profit share results in some obvious logical ambiguities.
I guess I need to formalize the problem. If, as has been done here, we define a company's profit share as its individual profit divided by the net profit of the market (where losses are just summed as negative profit), then, for example, if a company makes a positive profit, p, and the industry, as a whole, makes a net positive profit P, then the company's profit share is p/P (or (p x 100)/P as a percentage). Superficially just fine.
But what if the company makes that same profit, p, but the net industry profit is negative - a loss of P? The profit share calculation is now -p/P. The same magnitude number, but now negative in sign, representing the same actual profit but now in an overall loss-making market. A negative percentage representing a better performance than the same positive percentage. Even worse, that result is indistinguishable from the situation where the company makes a loss of p in a market with a net positive profit of P - both cases would result in reporting the same profit share, -p/P. That does not appear meaningful in any sense. Are you really arguing that it is a useful way to describe profit?
There's no need to formalize anything.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
Third grade math would say that 100% is the maximum you can have of any one thing.
This is purely accounting logic, and does not have much standing in the real world.
Things get fuzzy because it's using accounting rules P/L numbers, where you can have a negative profit, and then views the entire market as if it were an entity, and uses "net profit" to calculate percentages.
In reality, you can't have negative profit (profit meaning to make money). If you lose money, it's considered a loss. So logically, if you're calculating the percent each company has of market profits, only those making money should be counted.
You addressed neither the example nor my question, and instead just introduced a different example where an undefined result is the correct and reasonable answer, since, by definition, a change from zero to any finite number is an undefined fractional increase.
Firstly we were not talking about fractional derivatives (changes), we were talking about one quantity as a fraction of another which, third grade math notwithstanding, is different, and secondly, this method for representing profit share results in some obvious logical ambiguities.
I guess I need to formalize the problem. If, as has been done here, we define a company's profit share as its individual profit divided by the net profit of the market (where losses are just summed as negative profit), then, for example, if a company makes a positive profit, p, and the industry, as a whole, makes a net positive profit P, then the company's profit share is p/P (or (p x 100)/P as a percentage). Superficially just fine.
But what if the company makes that same profit, p, but the net industry profit is negative - a loss of P? The profit share calculation is now -p/P. The same magnitude number, but now negative in sign, representing the same actual profit but now in an overall loss-making market. A negative percentage representing a better performance than the same positive percentage. Even worse, that result is indistinguishable from the situation where the company makes a loss of p in a market with a net positive profit of P - both cases would result in reporting the same profit share, -p/P. That does not appear meaningful in any sense. Are you really arguing that it is a useful way to describe profit?
There's no need to formalize anything.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
I'd be more interested if you actually provided a reasoned response rather than just relying, as you often seem to, on personal insults. But perhaps third grade math is all you ever mastered, so I guess one uses whatever one has.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
Third grade math would say that 100% is the maximum you can have of any one thing.
This is purely accounting logic, and does not have much standing in the real world.
Things get fuzzy because it's using accounting rules P/L numbers, where you can have a negative profit, and then views the entire market as if it were an entity, and uses "net profit" to calculate percentages.
In reality, you can't have negative profit (profit meaning to make money). If you lose money, it's considered a loss. So logically, if you're calculating the percent each company has of market profits, only those making money should be counted.
The underlying problem, I think, is that from a mathematical point of view one cannot divide two non-scalar quantities. Profit/loss is non-scalar because it has direction and magnitude. A more valid and, I think, useful measure, would be profit, p, relative to market mean profit, ????, which would be (p - ????)/p. That is unambiguous in magnitude and sign.
If these numbers are really true, it paints a pretty ugly picture about how Apple has been just coasting along. How long has Apple been in the smartphone business? It's been doing relatively well by any standards. Yet for Samsung to just run a one-year blitz and take over the smartphone industry by storm it seems to indicate that Apple isn't even trying. Again Apple becomes the laughingstock of the smartphone industry and Wall Street. Just when Apple shareholders think they might see some light, along comes Samsung and steps all over Apple like a cockroach. Samsung made it look so easy. They're nothing and then BOOM, they drop a hammer on Apple's head in such a short time.
Market share hardly matters, but Samsung is on the verge of taking away both market share and profit share from mighty Apple. Just a quarter ago, I thought the Apple had close to 70% of smartphone profits. You really have to wonder what's going on at Apple. Were they not even aware about Samsung chipping away at the iPhone's foundation? I realize the smartphone market is in constant flux and the release of new iPhones can easily shift the tides of profit, but just the idea of Apple getting bitch-slapped by Samsung is really unsettling. The way the news media keeps announcing this is like Apple is done for. I guess Apple's economies of scale are no match for Samsung's economies of scale. I'm not sure what Apple is saving their reserve cash for, but maybe its about time they used it to put some distance between them and Samsung.
Do you even think before you post or do you just enjoy blurting out bulls**t?
I'd be more interested if you actually provided a reasoned response rather than just relying, as you often seem to, on personal insults. But perhaps third grade math is all you ever mastered, so I guess one uses whatever one has.
I'm not the one advocating non-standard math (and I can guarantee that I've taken math classes that you've never even heard of).
Percentage is obtained by dividing the item of interest by the total of all items. You don't choose only some of the items for the 'total' value - that would be silly. If you want to determine BMW's share of auto sales, you divide the number of cars BMW sells by the total number of cars sold by all manufacturers. You don't arbitrarily decide to eliminate the yellow Hondas, for example. That's what is being advocated here.
Consider, for example, the analogy if the different companies were subsidiaries of a larger group (call it "Market total" if you wish). You want to know what percentage of the profits each company makes. You have the Apple subsidiary making $53 M. Samsung subsidiary making $50 M. "Other" subsidiary losing $3 M. When you report profits to the SEC, you would report $100 M in profits and Apple would have 53% of the profits. Samsung would have 50% of the profits, and the "Other" subsidiary would lose 3% of the total. The total profits have to add up to 100%. That is completely controlled by GAAP rules - and is non-negotiable.
If you are evaluating a market rather than a subsidiary, the math works exactly the same way. The fact that you are unable to understand such a simple concept doesn't make it false.
The underlying problem, I think, is that from a mathematical point of view one cannot divide two non-scalar quantities. Profit/loss is non-scalar because it has direction and magnitude. A more valid and, I think, useful measure, would be profit, p, relative to market mean profit, ????, which would be (p - ????)/p. That is unambiguous in magnitude and sign.
One could certainly do that, but it doesn't make the standard way any less valid.
I'd be more interested if you actually provided a reasoned response rather than just relying, as you often seem to, on personal insults. But perhaps third grade math is all you ever mastered, so I guess one uses whatever one has.
I'm not the one advocating non-standard math (and I can guarantee that I've taken math classes that you've never even heard of).
Percentage is obtained by dividing the item of interest by the total of all items. You don't choose only some of the items for the 'total' value - that would be silly. If you want to determine BMW's share of auto sales, you divide the number of cars BMW sells by the total number of cars sold by all manufacturers. You don't arbitrarily decide to eliminate the yellow Hondas, for example. That's what is being advocated here.
Consider, for example, the analogy if the different companies were subsidiaries of a larger group (call it "Market total" if you wish). You want to know what percentage of the profits each company makes. You have the Apple subsidiary making $53 M. Samsung subsidiary making $50 M. "Other" subsidiary losing $3 M. When you report profits to the SEC, you would report $100 M in profits and Apple would have 53% of the profits. Samsung would have 50% of the profits, and the "Other" subsidiary would lose 3% of the total. The total profits have to add up to 100%. That is completely controlled by GAAP rules - and is non-negotiable.
If you are evaluating a market rather than a subsidiary, the math works exactly the same way. The fact that you are unable to understand such a simple concept doesn't make it false.
You did it again - you studiously ignored every point that I made, and instead produced yet more examples inapplicable to the issue. Are you actually reading and comprehending what I wrote or just railing against my conclusions? There is probably not much point continuing this further but, for the record:
Your BMW example is fine, but not pertinent because car sales are, by definition, positive, so summation over any space yields only positive terms and thus no ambiguity. And, if you had read my post you would have noticed that I was not advocating eliminating anything - just pointing out that the method used above to calculate profit share leads to obvious ambiguities and non-meaningful results in many situations.
Your restatement of the original case also doesn't address the issue - it is the example that triggered this discussion in the first place and the reason that others, including me, pointed out that the method used is mathematically flawed. Others produced counterexamples to show how it could give meaningless results while I demonstrated more formally how it could also give the same results for completely different conditions. You dismissed the others and simply ignored my arguments, instead just insisting that it works. Attempting to produce your own counterexamples that show where you think it does work is not a valid argument. Counterexamples (even if correct and applicable) refute rules, theories or hypotheses - they cannot be used to refute other counterexamples.
And just a suggestion - quit making vague boasts about your math training. Physicists and mathematicians (such as myself) can spot a layperson instantly.
if the company makes that same profit, p, but the net industry profit is negative - a loss of P? The profit share calculation is now -p/P. The same magnitude number, but now negative in sign, representing the same actual profit but now in an overall loss-making market. A negative percentage representing a better performance than the same positive percentage. Even worse, that result is indistinguishable from the situation where the company makes a loss of p in a market with a net positive profit of P - both cases would result in reporting the same profit share, -p/P. That does not appear meaningful in any sense.
I agree that it's more meaningful to consider only positive profits - the definition of the word profit is positive gain. A sum above 100% suggests that competitors' losses contribute to the increase of Apple's and Samsung's totals, which they don't.
People don't for example add feature phones into smartphone marketshare as 'negative smartphones'. Losses are by definition not profits because for one thing, the money to fund those losses will have come from other accounting periods so it's not right to include that money as contributory in this accounting period. Positive profit is money companies gain in an accounting period that they didn't already have.
The most meaningful way of putting it would be that Apple took 51% of the profit, Samsung 49% and everyone else made losses. The justifications for including losses are perfectly reasonable but I don't think they accurately reflect the success of a company in a given accounting period, which is the whole point of the numbers.
if the company makes that same profit, p, but the net industry profit is negative - a loss of P? The profit share calculation is now -p/P. The same magnitude number, but now negative in sign, representing the same actual profit but now in an overall loss-making market. A negative percentage representing a better performance than the same positive percentage. Even worse, that result is indistinguishable from the situation where the company makes a loss of p in a market with a net positive profit of P - both cases would result in reporting the same profit share, -p/P. That does not appear meaningful in any sense.
I agree that it's more meaningful to consider only positive profits - the definition of the word profit is positive gain. A sum above 100% suggests that competitors' losses contribute to the increase of Apple's and Samsung's totals, which they don't.
People don't for example add feature phones into smartphone marketshare as 'negative smartphones'. Losses are by definition not profits because for one thing, the money to fund those losses will have come from other accounting periods so it's not right to include that money as contributory in this accounting period. Positive profit is money companies gain in an accounting period that they didn't already have.
The most meaningful way of putting it would be that Apple took 51% of the profit, Samsung 49% and everyone else made losses. The justifications for including losses are perfectly reasonable but I don't think they accurately reflect the success of a company in a given accounting period, which is the whole point of the numbers.
Agreed, although I wasn't actually even suggesting that one should ignore the industry losses - just that in this situation one cannot reasonably divide one number by the sum of a set of positive and negative numbers, since even the sign of the answer is ambiguous in what it implies - i.e. a positive fraction could be either a profit in a profitable sector or a loss in a loss-making sector, while a negative fraction could be a profit in a loss-making sector or a loss in a profitable sector. It represents a sadly typical misunderstanding of basic arithmetic.
It still amazes me that people ask about the 50% 53% thing. It's been like that for years now. Don't people learn? Can't people try to figure it out by themselves? It seems pretty logical that some companies have negative profit so they end up rounding everything out to 100%. It doesn't take a genius to figure something like that out.
Comments
Quote:
Originally Posted by Steven N.
But it is not uncommon for an industry in disruption to show minimal or even no profits (losses outweigh profits). So under this flawed math, you could end up with whacky numbers like company A getting 1290% profit, company B getting 3543% of the profit
Or even worse:
Company A getting -254% of the profit.
To avoid these issues, you have profit and losses. Not just profit. It is not a hard concept to grasp.
You're partly right. On the Balance Sheet (the other part of a P&L) your profits and losses taken together have to sum to 100% (or, more correctly, a zero sum). This is why the "profits" side alone add up to 103%. It hasn't got the losses side added in yet.
That's accounting for ya! If you take only one side or the other of the ledger, you might end up with exactly those 'wacky numbers'...
Trying to follow this artcle....so lets say samsung spends 1 billion dollars to produce tablets. Unable to sell them, trade them in, or give them away. they take billion dollar loss or neg 100% profit. Apple spends 1 billion dollars to produce ipads. Sell all they can make. Lets see.....that means Apple earned 200% of the profit. Got it! but wait...wouldnt that also mean if samsung sold all they could make that they both would individually earn 100% of their share. Very interesting.........
Not quite. By the warped math of this article, Samsung would approach -infinity% of the profits and Apple would approach +infinity% of the profits. I say approach because your example has 0 profits and you get a divide by zero indeterminate value.
This makes no sense. Negative percentages are used primarily for a drop in a percentage.
Quote:
Originally Posted by Tallest Skil
Instead of having the exact same argument as the last time we had 103% profits in the industry, could someone find that thread and link to it?
I agree with TS! That way all the arguments relating to whether 103% of industry profits is possible will be available in 200% of the threads related to that topic.
There's no need to formalize anything.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
Third grade math would say that 100% is the maximum you can have of any one thing.
This is purely accounting logic, and does not have much standing in the real world.
Things get fuzzy because it's using accounting rules P/L numbers, where you can have a negative profit, and then views the entire market as if it were an entity, and uses "net profit" to calculate percentages.
In reality, you can't have negative profit (profit meaning to make money). If you lose money, it's considered a loss. So logically, if you're calculating the percent each company has of market profits, only those making money should be counted.
Quote:
Originally Posted by jragosta
Quote:
Originally Posted by muppetry
You addressed neither the example nor my question, and instead just introduced a different example where an undefined result is the correct and reasonable answer, since, by definition, a change from zero to any finite number is an undefined fractional increase.
Firstly we were not talking about fractional derivatives (changes), we were talking about one quantity as a fraction of another which, third grade math notwithstanding, is different, and secondly, this method for representing profit share results in some obvious logical ambiguities.
I guess I need to formalize the problem. If, as has been done here, we define a company's profit share as its individual profit divided by the net profit of the market (where losses are just summed as negative profit), then, for example, if a company makes a positive profit, p, and the industry, as a whole, makes a net positive profit P, then the company's profit share is p/P (or (p x 100)/P as a percentage). Superficially just fine.
But what if the company makes that same profit, p, but the net industry profit is negative - a loss of P? The profit share calculation is now -p/P. The same magnitude number, but now negative in sign, representing the same actual profit but now in an overall loss-making market. A negative percentage representing a better performance than the same positive percentage. Even worse, that result is indistinguishable from the situation where the company makes a loss of p in a market with a net positive profit of P - both cases would result in reporting the same profit share, -p/P. That does not appear meaningful in any sense. Are you really arguing that it is a useful way to describe profit?
There's no need to formalize anything.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
I'd be more interested if you actually provided a reasoned response rather than just relying, as you often seem to, on personal insults. But perhaps third grade math is all you ever mastered, so I guess one uses whatever one has.
Quote:
Originally Posted by Pendergast
Quote:
Originally Posted by jragosta
There's no need to formalize anything.
It's simple third grade math and is the way everyone in the world does it except for uneducated idiots on forums like this one.
Third grade math would say that 100% is the maximum you can have of any one thing.
This is purely accounting logic, and does not have much standing in the real world.
Things get fuzzy because it's using accounting rules P/L numbers, where you can have a negative profit, and then views the entire market as if it were an entity, and uses "net profit" to calculate percentages.
In reality, you can't have negative profit (profit meaning to make money). If you lose money, it's considered a loss. So logically, if you're calculating the percent each company has of market profits, only those making money should be counted.
The underlying problem, I think, is that from a mathematical point of view one cannot divide two non-scalar quantities. Profit/loss is non-scalar because it has direction and magnitude. A more valid and, I think, useful measure, would be profit, p, relative to market mean profit, ????, which would be (p - ????)/p. That is unambiguous in magnitude and sign.
Quote:
Originally Posted by Constable Odo
If these numbers are really true, it paints a pretty ugly picture about how Apple has been just coasting along. How long has Apple been in the smartphone business? It's been doing relatively well by any standards. Yet for Samsung to just run a one-year blitz and take over the smartphone industry by storm it seems to indicate that Apple isn't even trying. Again Apple becomes the laughingstock of the smartphone industry and Wall Street. Just when Apple shareholders think they might see some light, along comes Samsung and steps all over Apple like a cockroach. Samsung made it look so easy. They're nothing and then BOOM, they drop a hammer on Apple's head in such a short time.
Market share hardly matters, but Samsung is on the verge of taking away both market share and profit share from mighty Apple. Just a quarter ago, I thought the Apple had close to 70% of smartphone profits. You really have to wonder what's going on at Apple. Were they not even aware about Samsung chipping away at the iPhone's foundation? I realize the smartphone market is in constant flux and the release of new iPhones can easily shift the tides of profit, but just the idea of Apple getting bitch-slapped by Samsung is really unsettling. The way the news media keeps announcing this is like Apple is done for. I guess Apple's economies of scale are no match for Samsung's economies of scale. I'm not sure what Apple is saving their reserve cash for, but maybe its about time they used it to put some distance between them and Samsung.
Do you even think before you post or do you just enjoy blurting out bulls**t?
http://forums.appleinsider.com/t/155839/apple-samsung-capture-103-of-handset-profits-as-rivals-lose-money
I'm not the one advocating non-standard math (and I can guarantee that I've taken math classes that you've never even heard of).
Percentage is obtained by dividing the item of interest by the total of all items. You don't choose only some of the items for the 'total' value - that would be silly. If you want to determine BMW's share of auto sales, you divide the number of cars BMW sells by the total number of cars sold by all manufacturers. You don't arbitrarily decide to eliminate the yellow Hondas, for example. That's what is being advocated here.
Consider, for example, the analogy if the different companies were subsidiaries of a larger group (call it "Market total" if you wish). You want to know what percentage of the profits each company makes. You have the Apple subsidiary making $53 M. Samsung subsidiary making $50 M. "Other" subsidiary losing $3 M. When you report profits to the SEC, you would report $100 M in profits and Apple would have 53% of the profits. Samsung would have 50% of the profits, and the "Other" subsidiary would lose 3% of the total. The total profits have to add up to 100%. That is completely controlled by GAAP rules - and is non-negotiable.
If you are evaluating a market rather than a subsidiary, the math works exactly the same way. The fact that you are unable to understand such a simple concept doesn't make it false.
One could certainly do that, but it doesn't make the standard way any less valid.
Third grade math would say that 100% is the maximum you can have of any one thing.
In case you missed it before:53% + 50% - 2% - 1% = 100%
Quote:
Originally Posted by jragosta
Quote:
Originally Posted by muppetry
I'd be more interested if you actually provided a reasoned response rather than just relying, as you often seem to, on personal insults. But perhaps third grade math is all you ever mastered, so I guess one uses whatever one has.
I'm not the one advocating non-standard math (and I can guarantee that I've taken math classes that you've never even heard of).
Percentage is obtained by dividing the item of interest by the total of all items. You don't choose only some of the items for the 'total' value - that would be silly. If you want to determine BMW's share of auto sales, you divide the number of cars BMW sells by the total number of cars sold by all manufacturers. You don't arbitrarily decide to eliminate the yellow Hondas, for example. That's what is being advocated here.
Consider, for example, the analogy if the different companies were subsidiaries of a larger group (call it "Market total" if you wish). You want to know what percentage of the profits each company makes. You have the Apple subsidiary making $53 M. Samsung subsidiary making $50 M. "Other" subsidiary losing $3 M. When you report profits to the SEC, you would report $100 M in profits and Apple would have 53% of the profits. Samsung would have 50% of the profits, and the "Other" subsidiary would lose 3% of the total. The total profits have to add up to 100%. That is completely controlled by GAAP rules - and is non-negotiable.
If you are evaluating a market rather than a subsidiary, the math works exactly the same way. The fact that you are unable to understand such a simple concept doesn't make it false.
You did it again - you studiously ignored every point that I made, and instead produced yet more examples inapplicable to the issue. Are you actually reading and comprehending what I wrote or just railing against my conclusions? There is probably not much point continuing this further but, for the record:
Your BMW example is fine, but not pertinent because car sales are, by definition, positive, so summation over any space yields only positive terms and thus no ambiguity. And, if you had read my post you would have noticed that I was not advocating eliminating anything - just pointing out that the method used above to calculate profit share leads to obvious ambiguities and non-meaningful results in many situations.
Your restatement of the original case also doesn't address the issue - it is the example that triggered this discussion in the first place and the reason that others, including me, pointed out that the method used is mathematically flawed. Others produced counterexamples to show how it could give meaningless results while I demonstrated more formally how it could also give the same results for completely different conditions. You dismissed the others and simply ignored my arguments, instead just insisting that it works. Attempting to produce your own counterexamples that show where you think it does work is not a valid argument. Counterexamples (even if correct and applicable) refute rules, theories or hypotheses - they cannot be used to refute other counterexamples.
And just a suggestion - quit making vague boasts about your math training. Physicists and mathematicians (such as myself) can spot a layperson instantly.
I agree that it's more meaningful to consider only positive profits - the definition of the word profit is positive gain. A sum above 100% suggests that competitors' losses contribute to the increase of Apple's and Samsung's totals, which they don't.
People don't for example add feature phones into smartphone marketshare as 'negative smartphones'. Losses are by definition not profits because for one thing, the money to fund those losses will have come from other accounting periods so it's not right to include that money as contributory in this accounting period. Positive profit is money companies gain in an accounting period that they didn't already have.
The most meaningful way of putting it would be that Apple took 51% of the profit, Samsung 49% and everyone else made losses. The justifications for including losses are perfectly reasonable but I don't think they accurately reflect the success of a company in a given accounting period, which is the whole point of the numbers.
Quote:
Originally Posted by Marvin
Quote:
Originally Posted by muppetry
if the company makes that same profit, p, but the net industry profit is negative - a loss of P? The profit share calculation is now -p/P. The same magnitude number, but now negative in sign, representing the same actual profit but now in an overall loss-making market. A negative percentage representing a better performance than the same positive percentage. Even worse, that result is indistinguishable from the situation where the company makes a loss of p in a market with a net positive profit of P - both cases would result in reporting the same profit share, -p/P. That does not appear meaningful in any sense.
I agree that it's more meaningful to consider only positive profits - the definition of the word profit is positive gain. A sum above 100% suggests that competitors' losses contribute to the increase of Apple's and Samsung's totals, which they don't.
People don't for example add feature phones into smartphone marketshare as 'negative smartphones'. Losses are by definition not profits because for one thing, the money to fund those losses will have come from other accounting periods so it's not right to include that money as contributory in this accounting period. Positive profit is money companies gain in an accounting period that they didn't already have.
The most meaningful way of putting it would be that Apple took 51% of the profit, Samsung 49% and everyone else made losses. The justifications for including losses are perfectly reasonable but I don't think they accurately reflect the success of a company in a given accounting period, which is the whole point of the numbers.
Agreed, although I wasn't actually even suggesting that one should ignore the industry losses - just that in this situation one cannot reasonably divide one number by the sum of a set of positive and negative numbers, since even the sign of the answer is ambiguous in what it implies - i.e. a positive fraction could be either a profit in a profitable sector or a loss in a loss-making sector, while a negative fraction could be a profit in a loss-making sector or a loss in a profitable sector. It represents a sadly typical misunderstanding of basic arithmetic.
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