If you evaluate companies by free cash flow, the numbers look even worse. Even if a company is not engaging in accounting tricks that make themselves look very

If you evaluate companies by free cash flow, the numbers look even worse. Even if a company is not engaging in accounting tricks that make themselves look very profitable, what the paper margins say usually do not reflect the real cash remaining in the bank accounts. Certainly this turns in to a double edged sword for a certain segment of wealthy people. They do all of these things to make themselves look like they have a tremendous amount of money yet they sit right on the brink of failure. In reality, while the margins are slim, a company may be able adjust costs when mandated by law. Maybe restaurant portion sizes are way too large, maybe the quality or purity of raw materials is too high, maybe there are just too many employees. Some companies just have more room to do these things than others.