Quote:
Originally Posted by pornguy
So basically you are saying that just any ass hat and his brother can go out, Open a business and use only the banks money and a promise..
Well maybe thats where the US went wrong.
how a company can have profits in the BILLIONS and have a cash flow issue or the need to take a loan. If they have no cash flow, and they have to take a loan, then they have no profits.
Take for instance your Boing example.. If they had a 2.2BILLION dollar Profit in 2006 they where is the money. PROFIT means the BILLS are PAID.. Where all that CASH FLOW going.
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Again you're trying to project your own personal, small business, and the way it's run, onto multi-national corporations and beyond.
The companies with billions in profit are publicly owned, that means the profits are paid out to the shareholders OR invested in expansion of the company.
To use your all caps example...PROFIT means LAST YEAR'S bills are PAID. CASH FLOW is for NEXT YEAR'S bills and payroll.
You seem to think that a company was wrong for not keeping several months or even years of operating expenses as a cash reserve....but in a low interest rate environment (which we've been in for quite some time) that would be dereliction of their fiduciary duty to their shareholders.
If they didn't have every dime of available capital out there working to generate a return they'd have been fired. (and rightly so)
Your point of view is that if there's a sudden famine, that it's the average person's fault they're starving because they didn't have a year's worth of groceries stored in their basement....even though every week for their entire lives there was food available at the grocery store.