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(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).

Yeah, my dad has a very close friend who runs a car dealership up around here. He said you basically have to expect only $1 of profit out of every $100-$120 of car price you sell when all expenses are paid. You make WAYYY more money on the Service side of things.
(06-15-2021 08:08 PM)BearcatMan Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).

Yeah, my dad has a very close friend who runs a car dealership up around here. He said you basically have to expect only $1 of profit out of every $100-$120 of car price you sell when all expenses are paid. You make WAYYY more money on the Service side of things.

There are many ways car dealerships make money...they are very profitable.
(06-19-2021 01:10 PM)cmhcat Wrote: [ -> ]
(06-15-2021 08:08 PM)BearcatMan Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).

Yeah, my dad has a very close friend who runs a car dealership up around here. He said you basically have to expect only $1 of profit out of every $100-$120 of car price you sell when all expenses are paid. You make WAYYY more money on the Service side of things.

There are many ways car dealerships make money...they are very profitable.

Oh absolutely...just on financing alone most car dealerships could survive more than well.
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.
As a retired auditor, CFO I agree other metrics are more important. But for people like us we understand. The amount of value added varies widely. Those who use GAAP Statements understand or should.
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

Bolded... I treat my hair trying to interpret them too lol

Sent from my Pixel 2 XL using Tapatalk
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]
(06-15-2021 04:10 PM)Captain Bearcat Wrote: [ -> ]Wow. I never would have guessed that a car dealer would have a billion dollars in sales.

Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)
Reading this thread should be good for a couple hours of CPE.
(06-21-2021 11:41 PM)Cal1362 Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

Bolded... I treat my hair trying to interpret them too lol

Sent from my Pixel 2 XL using Tapatalk

Is that because they're nonprofit? Or is it something else?

For me, it's financial companies that are confusing. It's so easy to get confused over what is a loan that they lend to someone else (and thus an asset) and what is a loan that the firm is the borrower (and thus a liability).
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]
(06-15-2021 05:55 PM)Baleen Wrote: [ -> ]Since I like to be the facts guy, here's some interesting backup...

https://www.autonews.com/assets/PDF/CA114804323.pdf

Now to be fair, revenues are artificially inflated at dealerships because they're claiming the retail sale price as revenue. Obviously their costs are astronomical, so profits are a tiny fraction of what their topline is (usually about 1-2%).
Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.
Could a player not accept a scholarship and get money from whatever source?
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]
(06-20-2021 10:01 AM)doss2 Wrote: [ -> ]Not artificially inflated, it is called GAAP.

As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.

So UC’s athletic programs are awash in money? Someone has been lying about big deficits.
(06-23-2021 05:57 AM)cmhcat Wrote: [ -> ]
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]
(06-20-2021 06:20 PM)Cal1362 Wrote: [ -> ]As a career auditor and accountant, that is why Net Income or Operating Margin or even Cash Flow Margin is far far more important than Revenue or Sales. If you think it's interesting for car dealerships, you should see how Price Charged to "Profit" works for Hospitals. But those are topics for another conversation.

Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.

So UC’s athletic programs are awash in money? Someone has been lying about big deficits.

1) Most people are used to aspects of accrual accounting.
2) Almost all universities use fund accounting.
3) Under accrual accounting the costs of providing a scholarship, room and board, etc. are FAR less than what we see currently used and are based upon the actual burden to the organization.
4) Under fund accounting, the costs of providing a scholarship, room and board, etc. are fully borne opportunity costs.
5) Operating a for profit business inside of a not for profit organization gives one tremendous leeway to misstate costs. It is perfectly legal and it is perfectly deceptive.
6) If UC and other schools operated under accrual accounting, they would be awash in profits. Cash is a different matter altogether.

This is the crux of what the various SCOTUS opinions are based on. Universities operate for profit businesses which would be showing extremely impressive profits if they stated their financials in a manner consistent with those of other for profit businesses.

Instead they hide behind fund accounting principles and poor mouth everyone about their plight. All the while, the student athletes receive a substandard education and nothing else.
(06-23-2021 08:11 AM)QSECOFR Wrote: [ -> ]
(06-23-2021 05:57 AM)cmhcat Wrote: [ -> ]
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.

So UC’s athletic programs are awash in money? Someone has been lying about big deficits.

1) Most people are used to aspects of accrual accounting.
2) Almost all universities use fund accounting.
3) Under accrual accounting the costs of providing a scholarship, room and board, etc. are FAR less than what we see currently used and are based upon the actual burden to the organization.
4) Under fund accounting, the costs of providing a scholarship, room and board, etc. are fully borne opportunity costs.
5) Operating a for profit business inside of a not for profit organization gives one tremendous leeway to misstate costs. It is perfectly legal and it is perfectly deceptive.
6) If UC and other schools operated under accrual accounting, they would be awash in profits. Cash is a different matter altogether.

This is the crux of what the various SCOTUS opinions are based on. Universities operate for profit businesses which would be showing extremely impressive profits if they stated their financials in a manner consistent with those of other for profit businesses.

Instead they hide behind fund accounting principles and poor mouth everyone about their plight. All the while, the student athletes receive a substandard education and nothing else.

I agree with your over costing (ie non incremental costing) of scholarships (I recall a conversation with our firms audit head about that concept at a UC game many years ago). However, I still disagree that many schools are netting significant money from athletics. IF they did...where would that money go? Re-invested back into the programs and the university. They don't pay dividends to shareholders or owners. I hate the salaries paid to coaches and AD's, etc. but you have to pay someone the market rate to generate the revenue to maintain the programs. This shouldn't be spun as though some people are getting rich on the backs of poor players.
(06-23-2021 08:11 AM)QSECOFR Wrote: [ -> ]
(06-23-2021 05:57 AM)cmhcat Wrote: [ -> ]
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]
(06-21-2021 09:40 PM)Baleen Wrote: [ -> ]Not interested in getting into a GAAP-measuring contest on this with my fellow financial types. Personally I have tons of problems with how certain industries calculate certain financial metrics via GAAP, but that's a boring conversation for a different forum.

In my world, we obsessed over non-GAAP cash oriented metrics, like cash EPS, EBITDA, etc. as we found them to be far more useful in telling a story about a company's health than GAAP EPS, net income, EBIT, etc. Just because something is GAAP, doesn't mean it doesn't artificially inflate or deflate metrics (and definitely doesn't mean it tells a consistent story). As with most everything in life, the key is in the footnotes...

Re: hospitals - don't even get me started on this...I remember tearing my hair out as an analyst trying to interpret their financials!

My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.

So UC’s athletic programs are awash in money? Someone has been lying about big deficits.

1) Most people are used to aspects of accrual accounting.
2) Almost all universities use fund accounting.
3) Under accrual accounting the costs of providing a scholarship, room and board, etc. are FAR less than what we see currently used and are based upon the actual burden to the organization.
4) Under fund accounting, the costs of providing a scholarship, room and board, etc. are fully borne opportunity costs.
5) Operating a for profit business inside of a not for profit organization gives one tremendous leeway to misstate costs. It is perfectly legal and it is perfectly deceptive.
6) If UC and other schools operated under accrual accounting, they would be awash in profits. Cash is a different matter altogether.

This is the crux of what the various SCOTUS opinions are based on. Universities operate for profit businesses which would be showing extremely impressive profits if they stated their financials in a manner consistent with those of other for profit businesses.

Instead they hide behind fund accounting principles and poor mouth everyone about their plight. All the while, the student athletes receive a substandard education and nothing else.

I disagree completely with this statement. Student athletes get the same education as any other student.

I've taught student-athletes at 3 schools now. The only differences in classes are that 1) they're more likely to have an excused absence than non-athletes, 2) they have a monitor who asks professors if they go to class. If the answer is no (or if they are struggling), the monitor will force them to attend study hall or get them a tutor.

They also probably have better academic advisors than non-athletes (which one could argue is actually the opposite of "substandard")

Overall, it's actually very similar to the system that schools have in place for first generation college students.


Now if you're arguing that student-athletes tend to choose majors that provide substandard education, I won't disagree with you there. But again, they're receiving the same education as other students in the major.
(06-23-2021 11:23 AM)Captain Bearcat Wrote: [ -> ]
(06-23-2021 08:11 AM)QSECOFR Wrote: [ -> ]
(06-23-2021 05:57 AM)cmhcat Wrote: [ -> ]
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]
(06-22-2021 08:10 AM)Captain Bearcat Wrote: [ -> ]My favorite example of why net income & revenue don't matter: Lehman Brothers. In January 2008 it filed its most profitable year ever, with a 26% increase in annual revenue. In March 2008 it filed its 55th consecutive profitable quarter. In September 2008 it filed for bankruptcy.

There was no allegation of misreporting. The complete story was there for anyone looked beyond the income statement and took even a cursory look at the cash flow statement. (Lehman had negative $30 billion in CF from operations in FY2007 - homeowners were behind on their loan payments, which don't show up as income statement losses until the home is foreclosed on)

If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.

So UC’s athletic programs are awash in money? Someone has been lying about big deficits.

1) Most people are used to aspects of accrual accounting.
2) Almost all universities use fund accounting.
3) Under accrual accounting the costs of providing a scholarship, room and board, etc. are FAR less than what we see currently used and are based upon the actual burden to the organization.
4) Under fund accounting, the costs of providing a scholarship, room and board, etc. are fully borne opportunity costs.
5) Operating a for profit business inside of a not for profit organization gives one tremendous leeway to misstate costs. It is perfectly legal and it is perfectly deceptive.
6) If UC and other schools operated under accrual accounting, they would be awash in profits. Cash is a different matter altogether.

This is the crux of what the various SCOTUS opinions are based on. Universities operate for profit businesses which would be showing extremely impressive profits if they stated their financials in a manner consistent with those of other for profit businesses.

Instead they hide behind fund accounting principles and poor mouth everyone about their plight. All the while, the student athletes receive a substandard education and nothing else.

I disagree completely with this statement. Student athletes get the same education as any other student.

I've taught student-athletes at 3 schools now. The only differences in classes are that 1) they're more likely to have an excused absence than non-athletes, 2) they have a monitor who asks professors if they go to class. If the answer is no (or if they are struggling), the monitor will force them to attend study hall or get them a tutor.

They also probably have better academic advisors than non-athletes (which one could argue is actually the opposite of "substandard")

Overall, it's actually very similar to the system that schools have in place for first generation college students.


Now if you're arguing that student-athletes tend to choose majors that provide substandard education, I won't disagree with you there. But again, they're receiving the same education as other students in the major.

Captain, I should have clarified that I was speaking about athletes involved in so-called money sports (i.e., football, men’s basketball).

For the moment, let’s leave UC out of the discussion and look at UofL. Almost every money sport athlete carries a major of Exercise Science. Before I retired, there was an ex Louisville basketball player who worked in the same building that I did as a third shift security guard. When he enrolled at Louisville, he was told what his major would be according to him. He said that if he wanted to major in some other area, UofL wouldn’t honor his scholarship since he wasn’t a big time recruit.

I suspect that there are far more schools that operate in that manner than we know or care to know.

My friend from Louisville is still upset about his experiences there. The thing that surprised me is that he blames himself for not sticking up for himself and insuring a better future his family. He doesn’t blame UofL whatsoever. He is wise beyond his years.

Hopefully that clarifies my earlier statement regarding the quality of education that athletes pursue.
(06-23-2021 11:53 AM)QSECOFR Wrote: [ -> ]
(06-23-2021 11:23 AM)Captain Bearcat Wrote: [ -> ]
(06-23-2021 08:11 AM)QSECOFR Wrote: [ -> ]
(06-23-2021 05:57 AM)cmhcat Wrote: [ -> ]
(06-22-2021 03:41 PM)QSECOFR Wrote: [ -> ]If their public accounting firm had any integrity, they would have required LB to write off the shaky loans as impaired assets. The write down cannot be taken over time. It must reflect against the current quarter’s balance sheet and P&L.

Getting back to the subject at hand, the Supreme Court unanimously came to the same conclusion that I have been espousing for the last 30+ years. The players are just a step above indentured servants. Student athletes live with restrictions that other scholarship students at the same school don’t. Everyone is making money except those who bring in the fans.

So UC’s athletic programs are awash in money? Someone has been lying about big deficits.

1) Most people are used to aspects of accrual accounting.
2) Almost all universities use fund accounting.
3) Under accrual accounting the costs of providing a scholarship, room and board, etc. are FAR less than what we see currently used and are based upon the actual burden to the organization.
4) Under fund accounting, the costs of providing a scholarship, room and board, etc. are fully borne opportunity costs.
5) Operating a for profit business inside of a not for profit organization gives one tremendous leeway to misstate costs. It is perfectly legal and it is perfectly deceptive.
6) If UC and other schools operated under accrual accounting, they would be awash in profits. Cash is a different matter altogether.

This is the crux of what the various SCOTUS opinions are based on. Universities operate for profit businesses which would be showing extremely impressive profits if they stated their financials in a manner consistent with those of other for profit businesses.

Instead they hide behind fund accounting principles and poor mouth everyone about their plight. All the while, the student athletes receive a substandard education and nothing else.

I disagree completely with this statement. Student athletes get the same education as any other student.

I've taught student-athletes at 3 schools now. The only differences in classes are that 1) they're more likely to have an excused absence than non-athletes, 2) they have a monitor who asks professors if they go to class. If the answer is no (or if they are struggling), the monitor will force them to attend study hall or get them a tutor.

They also probably have better academic advisors than non-athletes (which one could argue is actually the opposite of "substandard")

Overall, it's actually very similar to the system that schools have in place for first generation college students.


Now if you're arguing that student-athletes tend to choose majors that provide substandard education, I won't disagree with you there. But again, they're receiving the same education as other students in the major.

Captain, I should have clarified that I was speaking about athletes involved in so-called money sports (i.e., football, men’s basketball).

For the moment, let’s leave UC out of the discussion and look at UofL. Almost every money sport athlete carries a major of Exercise Science. Before I retired, there was an ex Louisville basketball player who worked in the same building that I did as a third shift security guard. When he enrolled at Louisville, he was told what his major would be according to him. He said that if he wanted to major in some other area, UofL wouldn’t honor his scholarship since he wasn’t a big time recruit.

I suspect that there are far more schools that operate in that manner than we know or care to know.

My friend from Louisville is still upset about his experiences there. The thing that surprised me is that he blames himself for not sticking up for himself and insuring a better future his family. He doesn’t blame UofL whatsoever. He is wise beyond his years.

Hopefully that clarifies my earlier statement regarding the quality of education that athletes pursue.

Interesting.

I still think that they receive the same education as anyone else in exercise science receives. Although it is Louisville, so that's not saying much.

If he wasn't an athlete, what major would he have chosen? Somehow I doubt he would have chosen Engineering or Chemistry or something useful.



I actually taught an FBS football player once. 3-year starter at a Big Ten school, one of the most highly recruited kids at his position coming out of high school. Smartest kid in the class; I actually tried to convince him to apply for a PhD program. Of course, he was the kicker :)


In 2012, Urban Meyer posted this sign at OSU. Pretty impressive that his team had 8 engineering majors and 7 biology majors:

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