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Old 11-10-2011, 04:29 PM
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gTen
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Re: T-mobile Q3 results

Ok, I just want to clarify about the misconception people have about profit.

Higher year over year profit, or more profit has nothing to do with how well a company is doing. For a company to be doing well they only need 2 things, enough cash on hand to pay the bills and a profit of 1 cent.

Yes you heard me right...let me explain. When you calculate profit, it is after all expenses, after all debts, after all investments and after all R&D and after all salaries and after all bonuses.

There are 2 reasons for a company to have higher profits:

1) If you plan to sell/merge the company

2) If you want to pay out more dividends

When a company spends money on their infrastructure, investing and their employees, obviously its profits would go down.

One of the big reasons why our economy is doing so badly is ironically because companies are showing such high profit margins, because that means they are not spending money on things like R&D, Investing and paying their own employees.

Edit:

On the issue of Sprint, I don't know I kind of fear for their continued existence. They are throwing around too much money and considering they have ben in the red for so long that is not healthy. Don't get me wrong throwing in money can help jump start a business that is in the red. But they so far had too much failure and at this point without a backer it seems they are making too many sacrifices to get the money out there. For one, I'd cut Dan Hesse salary that guy gets paid way too much for so little...I mean sprints weakness has been 1 thing, poor management. simple as that.
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Last edited by gTen; 11-10-2011 at 04:43 PM.
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