this post was submitted on 18 Jun 2023
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Explain Like I'm Five
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Profit refers to the money you have left over after you pay all of your operating expenses. These expenses would include employee salaries, inventory cost, rent, transportation, everything it takes to run your business.
So, record profit would mean that the company in question made more money than they ever had before.
Which means it doesn't hurt to look at executive pay on top of historical profits, as those are counted as operating costs as well.
IIRC the ratio between highest and lowest earners within a company has skyrocketed from about 25:1 to over 3000:1 in the past 75 years or so...
Even that's subject to a little fuckery, though. In absolute terms? Relative to valuation? Relative to the wider market? I imagine an actual analyst would be looking at the calculation used.