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Politics : Fahrenheit 9/11: Michael Moore's Masterpiece
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To: redfish who wrote (1383)6/30/2004 2:46:42 PM
From: cosmicforce   of 2772
 
That's probably true on gross receipts - I was using a different model I've developed over the years based upon my experience with companies that make profitable things.

A good rule of thumb is, I've found, if you can't make a $100 retail widget for less than $30 parts costs, you don't have a business. Those same $30 dollars you paid your suppliers, probably cost them $10 from the manufacturer, who better be able to make them for $3 for the whole system to work producing profit for everyone. The part in this case is the movie, or other "previous step" in the process.

This is different than the operating margin obviously since that includes all the costs associated with adding value to the part.
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