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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (105020)	2/26/2009 1:43:03 PM
From: Cogito	Respond to of 543068

>>I think this is wrong. I think companies are laying off workers, because sales are down. If you are selling less widgits, you need fewer people to build widgits. Many companies are sitting on mountains of cash......<< Steve - Having cash on hand is not the same as making a profit. Let's not confuse balance sheets (cash on hand and other assets vs. debts) with profit/loss reports (income vs. expenses). Companies lay people off to reduce expenses and bring them in line with expenses, because, as you say, they aren't selling enough widgits. Not selling enough widgits means they are either making less money or losing it, no matter what the balance sheet may show. - Allen

To: Steve Lokness who wrote (105020)	2/26/2009 1:52:38 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 543068

<<<I think this is wrong. I think companies are laying off workers, because sales are down. If you are selling less widgits, you need fewer people to build widgits. Many companies are sitting on mountains of cash......>>> Normally sales would have to reach a break even point before you start earning lower profits. Your profits are highest on the last 10 or 20% of sales. All high flyers and heavily leverage companies are really hurting.