this post was submitted on 08 Nov 2023
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It doesn't, because you still have a tiny margin. Get one bad year and your business will be wiped out.
Not when the profit is billions, Loblaws could run at at a sizeable loss for the next decade and still be fine.
No, it can't. 4% loss will wipe out everything they've earned. That's the problem with low margins.
Yes it can, they've been making billions in profits every year for years. Unless they are morons and frittered away the profits, they absolutely can run at a moderate loss for years.
Why are you defending billionaires?
Because you don't understand economics and act like a 13yo kid.
Because you think the board should take the profits and be billionaires.
I clearly understand economics better than you, because Loblaws could easily survive years running at a loss given the BILLIONs in profits they currently make annually, and the billions their owners are worth.
You certainly don't understand economics... Why do you even argue then?
Clearly you don't, since you have no concept of how much money billions is.
It's all relative. I know, that can be a hard concept to grasp for some, but billion is not that much when it's a measly 4%.
You asserted Loblaws would go under from 1 bad year.
That's absolutely idiotic, Loblaws could have several bad years and have enough money in the war chest to weather that. Reletivity does not matter when they literally have billions to sustain themselves.
You're inability to grasp BILLIONS is astounding. You act like it's a million dollars.
Again, you don't understand economics and the scale.
First of all, a billion of profit in a year won't sit under the mattress. It will be used for investments into business or to pay dividends to shareholders. Thus the end balance in the bank account will be zero. That means if you have a billion loss next year, you can't operate your business year after as you don't have enough money. You will either shrink your operations and fire people or go bankrupt.
That also means that if you've invested in your business, next year your expenses are 1B higher, so now you need to earn more money to cover that.
Second, it doesn't matter if your profit is 1k, 1m or 1b. If it's 4% then it's 4% either way. It's basic school math.
You're forgetting the billionaire owners, who can fund money into it.
You're forgetting the ability to sell assets and stock.
You're forgetting that companies do actually keep war chests around.
You're forgetting loans and insurance.
You're acting like Loblaws is a little mom and pop shop that gets taken out by a bad year.
They are not, and you clearly know nothing about economics.