View Full Version : Little Fact

November 26th, 2003, 02:37
If for one year every business in the world surrendered it's profits (not wages or expense's) and devided it evenly between every family world wide, each family would receive around 2,400,000 (about US$3,700,000)

El Fugitivo
November 26th, 2003, 05:56
But, but then everyone would be...equal [shudder].

November 26th, 2003, 06:00
haha like that would ever happen

November 26th, 2003, 07:12
that figure can't be right... can it? :o :o :o :o :o

November 26th, 2003, 07:17
Originally posted by DanielW@Nov 26 2003, 02:12 PM
that figure can't be right... can it? :o :o :o :o :o
why wouldn't it be?

there is what - 6 billion people in the world? (i don't know how many families)
and there's a lot of money in the world

November 26th, 2003, 09:37
taking it as a world average theres probably about 6 people per family

so 1 billion families

1billion x $3.7million = US$3,700,000,000,000,000.

Thats about the figure I would expect US$3700Trillion

November 26th, 2003, 12:15
I doubt there is 3,700 trillion profit annually worldwide. The net profit margin of HUGE multinationals in, lets say the consumer electronics industry, is about 1%. Some small industries generate up to 30% net profit margin NOT EBITDA (earnings before interest, tax, depreciation, amarotization). But the revenues of these high net margin industries is minimal. The larger the revenues, the more people it employs, the wider the reach, the smaller the profit margin.

Not to mention the yearly losses and bankruptcies worldwide. There are many.

If that statement was true you would expect the joint stock markets of the world to grow at 3,7000 trillion dollars per year. This is because the stock market represents the shareholders of the companies, amongs which the net profit (if not retained for future investment) is distributed. As you very well know that is far from being the truth. Also the largest protion of stock market growth seen is due to speculation and not proportional to the dividents reversed (see the 1990&#39;s... NO dividents, HUGE growth). Yearly worldwide growth is very small. And there are years in which the growth is negative.

For that figure to hold ture, there would need to be 3.7 MILLION companies worldwide that have a yearly net profit of &#036;1Billion. If there were 3.7 million companies worldwide that made a billion dollars of net profit, I could simply invest in them, get shares and not work my entire life, and so could everyone.... which in turn would cause a collapse but thats another story. If you just take a look at the fortune 500 list you can see that 500 is so far away a number from 3.7 million. THere would need to be 3,699,500 companies worldwide that are undervalued.

The definition of &#39;family&#39; is a little shady as well. A lot of people have parents AND children. This makes the proper segmentation and distribution of wealth senseless. If a family is parents and children, then there are people that belong to more than one family (they have parents AND children). This would mean that the number of families worldwide would be closer to a 1:1 ratio between population and not a 1:6 ratio.

Jet Set Willy
November 26th, 2003, 14:42
There definitely isn&#39;t that much net profit. Non-predictive economics is not a subject which impresses me, it&#39;s always wildly in-accurate and like most statistical disciplines it is usually bent (intentially or unintentially/subconciously) to show what the mathematic wants the figures to read.