Posted on 08/29/2006 7:58:05 AM PDT by PDR
The purpose of this POLICY PAPER is to contribute to the debate over gas prices and industry profits by deciphering the relationship between oil company accounting profitability and retail gas prices using publicly available data. We focus on profitability rather than on the level of profits because rhetoric of high gas prices and profits hinges on the belief that oil companies are unfairly profiting from high gas prices, and this argument implies that the profit margins are higher at high prices than at low prices. In this POLICY PAPER, profitability is measured as the profit-sales ratio of firms.10 The profit-sales ratio is computed from financial forms filed by firms with the Securities and Exchange Commission (“SEC”). We apply several empirical tests to these data to examine the
relationship of oil company profit margins to retail gas prices.
Exactly.
$1 a gallon, 10% profit, profit is 10 cents a gallon.
$2 a gallon, 9.82% or 8.2% profit depending on how you read it, profit is either 19.64 or 16.4 cents a gallon.
$3 a gallon, 9.82 or 8.2% profit, their profit is either 29.46 or 24.6 cents a gallon.
Those poor poor robber barons. Where can I send a check to help them out?
Those robber barons as you call them are investing a lot in our future.
Oilpatch Faces Long List of Multibillion-Dollar Decisions in Next 4 Months
http://www.freerepublic.com/focus/f-news/1691717/posts
Its business. They are only investing because they think it will be profitable.
Find a quote in any of those investment portfolios or reports that says in some way 'we are finding new sources of fuel because we care about people, even though we think we will lose money'
What business do you think does or should operate that way? How heavily do you invest your own money is such a venture?
I just paid $2.599 a gallon at my local Fuel Warehouse.
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