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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (228520)	4/10/2005 1:46:13 AM
From: Mani1	Read Replies (2) \| Respond to of 1577029

Re " I'm a CPA, but I haven't the slightest idea what inventory accounting implications are for these companies -- and I'd wager neither you nor the others on this board do, either. I know they're on LIFO, and to the extent they're using that inventory, profit margins are inflated by these crude price increases. LOL, they should take your CPA license away :) First of all, LIFO accounting is not allowed in Europe, where many of the oil companies are located. Only American companies can use it. Second you got it completely backward. LIFO accounting REDUCES net income during inflationary environment. The reason is simple; all recent inventory purchases (at higher price) are moved out first. All old inventories (low price) are kept for lower inventory asset, lower income. Companies (mostly private) like LIFO for this exacts same reason, it reduces reported net income and of course less tax, thus increased cash flow. Sorry, LIFO accounting method has nothing to do with why these companies’s are making record earnings. As far as competitive market taking care of everything, well that is what everyone said during California’s “energy crisis”. It did not turned out to be correct. Mani

To: i-node who wrote (228520)	4/10/2005 4:47:51 PM
From: tejek	Respond to of 1577029

>>> If you look at the bottom line you will see oil company's are greatly benefiting. Look at their earnings, stock price etc. Comon David, this is obvious. I am not saying that it means they are doing something necessarily wrong. I make no argument concerning net profits -- they're up. I simply have no problem with it. Then why did you pose this question in another post to Z which implied that oil profits were not up: "Can you, in fact, prove that increased oil companies' profits resulted from these price increases? Hint: Exxon's gross profit margins in '02, '03, and '04 were:" '02 55% '03 47% '04 45% Message 21214237 The truth is what you don't want is anyone regulating the oil companies because you feel these profit increases are temporary.......which may well be a reasonable arguement. But instead of saying that, you criticized Z and suggested that his assumptions were incorrect. And when he persisted, you attacked him directly, not his argument. Its too bad you have such a problem with being honest. It would make everything a lot less complicated.