[Cadaverous Pallor]

Originally Posted by Kevy Baby

I didn't say the two were associated (athlete's pay and the price of gas) - I addressed them separately. Athlete's et. al. are paid as much as they are because they are worth it. (In theory at least: as a Dodgers's fan, I would say that Andruw Jones is not worth what he is paid, but that is a topic for another thread). They help teams win and/or are exciting to watch, so it makes the team more entertaining.


Like I said, all the info was lost, but I do remember that Disney and Apple were two companies that made a HIGHER profit margin than the oil company I compared to (which I believe was Mobil as their announced profits shocked people at the time).

Here's a good article about this.

Exxon nation. If Exxon Mobil were a country, its 2007 profit would exceed the gross domestic product of nearly two thirds of the 183 nations in the World Bank's economic rankings. It would be right in there behind the likes of Angola and Qatar—two oil-producing nations, incidentally, where Exxon has major operations.

<snip>

Ahead of the pack. Exxon Mobil's profits are 80 percent higher than those of General Electric, which used to be the largest U.S. company by market capitalization before Exxon left it in the dust in 2005. The new economy? Microsoft earns about a third as much money. And next to Exxon, the world's largest retailer, Wal-Mart, looks like a quaint boutique, with annual profits of about $11 billion.

<snip>

On the margin. The oil industry urges people to look beyond its profits to its profit margin: about 7.6 percent of revenues late last year. That's not much higher than the 5.8 percent profit margin for all U.S. manufacturing, and if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales.

But unrivaled returns on equity. However, profit margins across industries vary greatly based not on how well each business is doing but how capital- or labor-intensive it is. Oil is among the most capital-intensive. But look at the oil industry's profits compared with shareholder equity it has available for investment. The U.S. Energy Information Administration's most recent analysis of the oil industry's performance, released just last month, showed oil industry return on equity of 27 percent—about 10 points higher than that of other manufacturers. And it has been higher throughout this recent era of high world oil prices, just as it was back during the oil shock that hit in 1980.

Profit margins aren't the whole story.