It really all depends upon how you look at the numbers.

Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

Oh, that is a very ugly number by itself. And if you look at it in isolation, what you appear to have are really bloated profits.

Until you break it all down.

You see, $11.68 billion is a mere 8.4% of the total revenue taken in by the corporation. Put differently, if you owned a company that did $100,000 in a quarter, you would have actually only earned $8400 during that time period -- which would mean that your annual income as a business owner would have been a paltry $33,600. So as you can see, the profit as a percentage of revenue is hardly exorbitant.

Now on the other hand, there are some other numbers in this article that you should consider.

In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called "other taxes."

Got that -- Exxon paid $32.36 billion in taxes worldwide last year. Put differently, that means that 23.4% of revenues went to pay taxes. And going back to my hypothetical small business making $100,000 in a quarter, that would translate to $23,400 in taxes for the quarter or $94,600 in taxes for the year. O, yeah -- that would mean that the government would be taking roughly $2.78 for every dollar that you as a business owner made.

The other 68.2% of the revenue? That would be spent on business overhead -- including employee pay. I wish that the financial reports supplied broke out how much Exxon was contributing to the economy in terms of employee salary and benefits. I suspect it far dwarf that $11.68 billion in profit.

But then again, focusing on that number might put an end to the class warfare rhetoric of certain segments of our body-politic.

H/T istockanalyst.com

Posted by: Greg at 02:22 PM | Comments (2) | Add Comment
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