Slashdot | Wal-Mart Threatens Studios Over iTunes Sales:
Walmart braggs about its associates being stock holders. They pay a dividend far lower than may be returned on Government Bonds or from even a simple CD at the bank. All of this would appear to be a company with marginal earnings. Actually Walmart finances its stores through the various Industrial Development Boards. They don't own the stores or even pay for them. Walmart then demands tax free status to open up in a town. As such they don't even pay to educate the next generation of kids to work in their stores or be their customers. They factor their inventory on a 60 day delayed after sale payment schema. All of this said you can do your earnings calculations on a company that has no investment or risk and is making markup on all sales. The company then has an inventory turn rate of about 90 times a year with a net (after all those stinking worthless employees -- for effect) markup on each sale of nearly 40%. Doing the simple math here they are a company earning about 90 * 40% a year on an cost basis against an investment that is not theirs and is so low that ROI is impossible to do anything but estimate. This means that the company is earning about 3600% against 100% of the entire investment of all parties in the store. They against their part which may be even less than 10% of that are earning at least 36,000%.
The upshot of this is that they build massive devices in the supply chain to scrape off this profit and avoid stockholders, tax entities and other factors that the are obligated to pay.
To be blunt capitalism is where investors get paid for earnings. That is what Walmart will never do. They are structured to defraud their stockholders.
4:43 PM
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