Agent.X7 wrote on May 10, 2012, 12:07:

InBlack wrote on May 10, 2012, 10:26:
What the fuck? Is it just me or are these numbers that these big corporations throw around waaay out of proportion.

How the fuck can anyone lose 2.8 Billion dollars and not go bankrupt RIGHT IN THAT FUCKING SECOND???

Price cuts? Really? Price cuts are to blame? So why did they fucking CUT THE PRICE then?

Remember, this is a business. Businesses do not account for money in the same way real people do. Some businesses post loses every year, and yet they are still around after decades. It's because a loss isn't really what it sounds like. Accounting magic.

Sales - Cost of goods sold = Gross profit
Gross profit - expenses = net profit

Always remember that ANY money the company spends is an expense. Hence, if you sell $1 million in product and it cost you $500k to produce, you have a net profit of $500,000. Your rent, utilities, etc all come to $250K, so you have $250k left, right? Now, pay employees, bonuses, and expense anything that doesn't really have to do with making the product but you can get away with it because the tax system is wacked. Now that remaining $250k is gone, plus another $30k in write offs.

Now you post a $30k loss and avoid paying any taxes because - after all - you didn't make any profit, right?

Don't forget Sony is a huge company that owns many divisions. If they come close to posting a profit they pay another division an obscene amount of money to expense it, and then post a loss to avoid taxes.