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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (174601)	5/15/2003 11:23:16 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 186894

John, What remains true is the essence. If we are measuring profit of an enterprise, then it is the change in wealth generated by that enterprise for its owners. You will note that we do not subtract "Dividends" from earnings for exactly this reason. Dividends flow out to the owners, and although they reduce the wealth of the legal entity, they increase the wealth of its owners to the same amount, thereby having no effect on profits. No, this is because profits are calculated FIRST, and then a decision is made as to whether to distribute or continue to distribute a part of those profits as dividends. Let's say an employee making $20K per year for a company with revenues of $200K per year and no other expenses has his compensation changed from a constant $20K to 10% of profits. The profits would first be calculated without the profit sharing compensation and then the profit sharing calculation would be made, resulting in the same $20K compensation until the revenues changed. This is a perfectly normal use of the word profit and the profit that is shared is NOT entered as an expense. Regards, Don