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Profit is extracting money from customers. Shareholder returns can come from profit, or selling off assets, or taking on loans, or underfunding pensions, or pr
by HWR_14 3y ago
Profit is extracting money from customers.
Shareholder returns can come from profit, or selling off assets, or taking on loans, or underfunding pensions, or probably other ways financial experts can invent.
- lotsofpulp 3y agoThe financing agreements surely require business assets and equity as collateral. At the end of the day, any cash flow that goes to the owners has to come from long term profits from the business, which comes from extracting money from customers. Maybe not today or this year or next year, but everyone is always going to want a return on the money they put in, whether it be owner or lender.
- HWR_14 3y agoUnless I sell off assets. Or take loans now, give the proceeds to the shareholders and get a bonus for it, and leave before the company declares bankruptcy. Or leave a unfunded pension obligation. Or run a nationally important service into the ground and then need emergency government money to keep providing it.
- newsclues 3y agoDo we consider the government a customer?
- HWR_14 3y agoIf it's buying goods and services. I would not treat it as a customer, and instead one of the unenumerated other ways of generating shareholder dividends, if it paid money to keep a nationally vital industry from imploding under the weight of its bad choices.