Profit margins....
Seems many conversations on these forums relate to cost cutting corners taken by RV manufacturers'... undersized tires / wheels / axles , electric vs. disc brakes , insulation materials, frame ty...
Forum Discussion
cdlaine,
Having had a fine business for nearly 40 years before retiring, I do know something about true profits and perceived profits. I've watched so many of my competitors get into financial trouble, go under, or closedown over the years and I have also served on the board of directors of non-competitors for many years. A business can only manipulate bottomline financial reports for so long before it becomes known and the facts rear their ugly heads! True profits in businesses are much lower than most people seem to think.
An actual true example is that if I were to tell you that one large business I know well had just under 1 billion in after taxes net profit. Sounds like WOW! until I tell you that they had over 16 billion in sales for the business year. Actual true profit was a mere 5.5% and yet they were honored as an extremely profitable business partly because the previous year's bottomline final profit was only 3.9%. Simply and wisely investing that same 16 billion would have resulted in nearly the same 5.5% proceeds and not having but a few people employed to do it. Where would the present between 10,000 and 20,000 employees be working then? (not going to give the actual number of employees as it could be traced to the business name).
The only thing that is common to ALL businesses it that the proceeds coming into the coffers must be more than the overall cost of keeping the business operating/running. If not, certain demise will take over. The healthcare costs of uncertainty over the last few years is and has created a tight fist grip turmoil on business operations and outlooks. Depending on the near future developments/decisions, it may or will most likely decimate a huge percentage of businesses viability and any future growth unless solved correctly and honestly. Remember that the monies taken to finance forced programs/actions comes directly from the purchaser's of a businesses products or services. YOU, the buying public ultimately pay these costs whether you like it or not as no legal business prints their own money. It comes to them from SALES and the debt holders/stock owners must be repaid or the businesses stock/operating capital/borrowing ability will cease! You, the public are the one who is the product/services purchasers!
westernrvparkowner prettymuch summed it up as there's no difinitive answer to your thread post overall. There are vast differences in short term profits and long term profits. Most businesses bottomline goes up and down like yo-yo. One defined time period may exhibit high profitability and the next may be deep in the red. One thing to remember is that an "in the red" period doesn't just vanish into thin air. What actions taken or financial step entered into caused by the "in the red" period are usually spread out over a long period into the future plus interest etc accrued. Only way for a business to escape repayment is to file a bankruptcy section or sellout.
Having had a fine business for nearly 40 years before retiring, I do know something about true profits and perceived profits. I've watched so many of my competitors get into financial trouble, go under, or closedown over the years and I have also served on the board of directors of non-competitors for many years. A business can only manipulate bottomline financial reports for so long before it becomes known and the facts rear their ugly heads! True profits in businesses are much lower than most people seem to think.
An actual true example is that if I were to tell you that one large business I know well had just under 1 billion in after taxes net profit. Sounds like WOW! until I tell you that they had over 16 billion in sales for the business year. Actual true profit was a mere 5.5% and yet they were honored as an extremely profitable business partly because the previous year's bottomline final profit was only 3.9%. Simply and wisely investing that same 16 billion would have resulted in nearly the same 5.5% proceeds and not having but a few people employed to do it. Where would the present between 10,000 and 20,000 employees be working then? (not going to give the actual number of employees as it could be traced to the business name).
The only thing that is common to ALL businesses it that the proceeds coming into the coffers must be more than the overall cost of keeping the business operating/running. If not, certain demise will take over. The healthcare costs of uncertainty over the last few years is and has created a tight fist grip turmoil on business operations and outlooks. Depending on the near future developments/decisions, it may or will most likely decimate a huge percentage of businesses viability and any future growth unless solved correctly and honestly. Remember that the monies taken to finance forced programs/actions comes directly from the purchaser's of a businesses products or services. YOU, the buying public ultimately pay these costs whether you like it or not as no legal business prints their own money. It comes to them from SALES and the debt holders/stock owners must be repaid or the businesses stock/operating capital/borrowing ability will cease! You, the public are the one who is the product/services purchasers!
westernrvparkowner prettymuch summed it up as there's no difinitive answer to your thread post overall. There are vast differences in short term profits and long term profits. Most businesses bottomline goes up and down like yo-yo. One defined time period may exhibit high profitability and the next may be deep in the red. One thing to remember is that an "in the red" period doesn't just vanish into thin air. What actions taken or financial step entered into caused by the "in the red" period are usually spread out over a long period into the future plus interest etc accrued. Only way for a business to escape repayment is to file a bankruptcy section or sellout.
