@seanet02

Having read your post half way through it, it seems likely that you did not deduce what I've been trying to say. In my previous post about the 90% which I referenced about 10% going to tax, I clearly quoted


Talking about tax, can someone please tell me what the Tax rate is within these states? I'm thinking probably at least 10% of [size=14pt]earned revenue[/size](accrual basis) (although this is a wrong formula but an accounting norm standard for Nigeria), that leaves 90% of the money. I guess I did not complete my post there at the bold large portion

Perhaps I thought you could deduce what I was saying or perhaps my thoughts weren't clear enough; however, my point was, given the way the tax system is in Nigeria (taxes paid before expenses), which is why I said it was wrong but an accounting norm standard for Nigeria. That was an assumption because I have heard that is the way govt collects it's taxes NOT on profit gains but Revenue gains. As you can see, following the sequence of things, and like I stated, after Taxes (then expense).


I will like to make clear that the 90% which I referenced was based on assumption (if taxes are paid before expense) and NOT the other way around. Although accounting standards and formats are pretty much the same thing from country to country, or perhaps just about same computations, different methods of tax collection widely differ across govt within the same state like Nigeria let alone across countries. Now if I may, I hope I was able to make clear about your hypothetical.

According to your hypothetical, my 90% NEVER referenced it as PROFITS, so how you deduced or thought I said profits was something that baffled me. Now back to your hypothetical analysis, if Company A made $1,500 in Revenues, using my full example (not partial), I said  30% COGS, 30% to 40% or avg of (35%) goes to payroll and other Admin exp,  5% Corporate Responsibility, however, retained earnings (Profit after Taxes less dividends) is after taxes has being deducted not before taxes (going by your logic). Using a vertical analysis, here is what it should look like


Here we have



Items                  Credit              %           %        Debit

Revenues        $1,500.00      100%

COGS                                         30%      $450.00

Payroll EXP                                 35%      $525.00

Corp. Responsibility                   5%      $  75.00

Total Expense                100%  70%   $1,050.00

Profit before Tax  $1,500.00                 30%      $450.00

Tax Liability                                 10%      $150.00

Net Profit                                         20%      $300.00

Total                                 100% 100%


Keep in mind that there's a profit of $300 which represents 20% of the revenue, so if you choose to set aside 10% towards Retained Earnings and 10% towards dividends, Mr. Ibrahim is pretty much left with 10% of the total amount. I don't know if you understood my stance, but my argument has always been either way, more than 85% of what he makes (revenues) not PROFITS flows into circulation one way or another, either way, his bulk of profit to be remitted back to you guys is either less or not even at all because like you said (if it's a Publicly Traded Company), there are high uncertainties  that dividends will not be paid annually or ever every two years due to other obligations.

why did that yoruba politician jump into the lagoon? Yoruba pple oya comment.

Sorry, i was using my BB yesterday night as i was still outside so could not really do much. Will edit it now.

ferdiii:

why did that yoruba politician jump into the lagoon? Yoruba pple oya comment.

baba lawo tell am to do so