Katrina

[Selma in Sandy Eggo]

Originally posted by hal 9000:
...our GSO only stands to make just under $1 million for that year. The horror!

Good job. Out of that gross profit on sales, there're the operating expenses of the station, various business taxes, insurance, salaries for the employees, business loan(s) on the property and structure. I don't have any data to support a set of reasonable assumptions on those costs; anybody know what an actual net profit on the business might be?

[OperaTenor]

Originally posted by Haggis@wk:
"Just goes to show you; they're not reading the links I post......"


You post links?????

Sorry, work is a full time bear and I'm feeling alot like that salmon swimming upstream......

It's so much fun(and oh! so rare) to serve you a slice......................even if it's a sliver thin one...............

[OperaTenor]

Let's see.....

Say the GSO's got 4 full or part-time employees, we average their wages at $25,000/year => $100,000.

If there are any food/snack/etc. consessions, they will be a greater profit center than the gas, so let's just set that aside for simplicity's sake, as well as any taxes or fees associated with it.

Hal accounted for inventory overhead in his calculations.

That leaves business and property taxes, plus any euiqpment loans, and rent/mtg. on the property. For rent/mtg. let's assume the property costs $2.00/sq ft triple net, which should take property taxes into account. Assume a 10,000 sq ft lot for the station, => $240,000/year. That leaves business associated taxes, and here would be where I'd have to fudge. Let's assume $50,000/year, just to be safe(probably on the order of a decimal place, IMNSHO). For equipment/facilities costs, to be safe, let's say he's paying just as much for that, => another $240,000.

I think that should conservatively cover overhead so we have;

$100,000
$ 50,000
$240,000
$240,000
________
$630,000

From $1 million, still leaves $370,000 in pure profit. And that's not taking a food/snack concession into account, where the net profit margin is >50%(probably closer to 100%).

I think I could suffer through earning that kind of money.

<small>[ 09-02-2005, 11:34 AM: Message edited by: OperaTenor ]</small>

[Trumpetmaster]

Don't forget Oil Changes and Car Repairs....

[piqaboo]

For those four employees to earn $25K each (gross), the business owner pays out in the vicinity of 50K each: workmans comp,social security, benefits etc. Plus his own social security etc = ~52% of his gross pay.
He also has hefty insurance incase a customer stubs their toe in the parking lot, major fire insurance policy, etc.
Cost of disposing of hazardous waste (oil changes, tires).
Cost of cleaning tanks adn replacing regularly if infrequently.
I'm guessing the GSO ends up netting "salary" of <$100K/year. Nice, but not obscene.
But thats based on our math.

Based on local newsstories, independent operators are on a much shorter shoestring than that. They end up being driven out of business by the slightest increases in overhead costs, such asthe steeply rising gas prices. Their margin is constant, and slim, so they cant compete with distributer-owned stations inkeeping prices down AND when the cost goes up, sales go down, so profit goes down.

[OperaTenor]

Hi Piq,

Thanks, I forgot about that part of it, but if you think the GSO's paying for their health insurance, nope. He'll allow them to pay group rates and get the eligibility(the more individuals he gets into his group, the cheaper the individual premium is for him), but he won't pay benefits. No 401K's, no paid vacation, no paid sick time.

I think it would be more realisitic to cut that figure in half.

To me, the big question mark is, do we know for sure what the actual margin is on a gallon of gas for the GSO?

The GSO isn't the real profit center, IMO. Somewhere up the food chain is where the gouging is taking place. Unfortunately, I believe it's a level that is in bed with the powers that be, so it will never be addressed.

Now I'm glad we don't have BP out here in SoCal!

[Shapley]

Hal,

last time I looked, 5000 gals @ 1.25/gal. cost $6250 with the re-investment of $500, the GSO would need to borrow $5750, not $5250. This would reduce the week 2 profit to $1500, leaving $750 to reinvest.

Week three, the fuel could cost $7500, less the $750 re-investment would require a loan of $6750, leaving a profit of $1750, leaving only $875 to reinvest.

Are you sure about those figures?

It appears to me that the increase in profit is reduced by half each week, which is logical, since costs are rising but markup is flat. Thus, after five weeks (five half-lives, OT), the increase in profits is statistically lost.

<small>[ 09-02-2005, 12:56 PM: Message edited by: Shapley ]</small>

[Haggis@wk]

This is good news

” The United States has an oil reserve at least three times that of Saudi Arabia locked in oil-shale deposits beneath federal land in Colorado, Utah and Wyoming, according to a study released yesterday. . . .

For years, the industry and the government considered oil shale — a rock that produces petroleum when heated — too expensive to be a feasible source of oil.

However, oil prices, which spiked above $70 a barrel this week, combined with advances in technology could soon make it possible to tap the estimated 500 billion to 1.1 trillion recoverable barrels, the report found.”

I think this means that we'll have plenty of oil, if somewhat more expensively, to last until we switch to something better.

Negative reports about the impending disaster the "Peak Oil" analysis predicts is, at most, talking about "Peak Cheap Oil."

And as is always the case, once started, the cost of extracting this stuff will fall significantly.

"Honey!! Call the Chevy dealer and tell him we're BUYING the Yukon and let the kid have the damn Prius!!!!!!!"

<small>[ 09-02-2005, 12:27 PM: Message edited by: Haggis@wk ]</small>

[zlosin]

Is this an SAT test question?

[OperaTenor]

I hope Shell is successful with their development.

[Selma in Sandy Eggo]

Originally posted by OperaTenor:
Now I'm glad we don't have BP out here in SoCal!

Check the bottom of the newer ARCO signs. What's that? A green and yellow zinnia!

[OperaTenor]

Wouldn't know about that. I haven't bought gas at ARCO in at least 15 years.

[BigJon@Work]

Hastert's Quotes It looks like Dennis Hastert and I are in agreement. I don't know whether to be proud or chagrined. :confused:

<small>[ 09-02-2005, 03:33 PM: Message edited by: BigJon@Work ]</small>

[piqaboo]

LOL.

Office discussion just now reaching the point we were all at yesterday am. Folks just starting to figure out that if your fridge is underwater for 4 days, you might not have food to eat.....

[Shapley]

Maybe we should build Cambodian style stilt houses.

[Selma in Sandy Eggo]

Cambodian style stilt houses, with really sturdy stilts, might be an option. I still think canals and islands might work better for the lower-than-sea-level parts of the city. Need a civil engineer to check my assumptions, though.

Rebuilding New Orleans, as it was before the hurricane, might not be the way to go. This would be as good a time as any to try something different. I mean, the whole levee-floodwall-dike approach seems to have inherent hazards, and New Orleans is still a potential hurricane target. The US cannot do without a major port right about where New Orleans is located so it's got to be rebuilt one way or another.

[piqaboo]

Stilts, saltwater, boats. Sounds like the bayou area to me. Keep a wild crocodile 'neath your house to eat the table scraps and save on cleanup costs. Crocodiles way meaner than alligators, which live in the bayou.

I still think they need a little dutch boy.

Actually, despite above comments, levees AND stilts might be the way to go. Keep the gators and crocs where they belong most of the time, but have the safeguards in case of another flood. But.... how wind-worthy are stilted houses? Maybe there'd be nothing left to survive the flood, even with brick or concrete stilts.

[OperaTenor]

I vote for the Venice-style rebuild. It allows for max drainage when there's an influx of water while keeping a city intact. However, learning the lessons of Venice and ensuring mean ground level is adequately high enough for any eventuality is important. The occasional flooding of Piazza San Marco and the Doge's palace is pretty darn annoying.

This could be done in a very first class manner, and could be timeless.

IMO, levees are a bad idea from a couple of standpoints. Primarily, water is being forced to occupy the same square footage of real estate regardless of volume. Water is an extremely tenacious and powerful liquid, as has been demonstrated over and over again through history, and will eventually win when attempts are made to confine it.. Secondly, ecologically, levees are relatively disruptive to river ecosystems.

The canal system, by comparison, would be positively harmonious, mechanically and ecologically.

JMHO.

<small>[ 09-02-2005, 06:20 PM: Message edited by: OperaTenor ]</small>

[hal 9000]

Originally posted by Shapley:
Hal,

last time I looked, 5000 gals @ 1.25/gal. cost $6250 with the re-investment of $500, the GSO would need to borrow $5750, not $5250. This would reduce the week 2 profit to $1500, leaving $750 to reinvest.

Week three, the fuel could cost $7500, less the $750 re-investment would require a loan of $6750, leaving a profit of $1750, leaving only $875 to reinvest.

Are you sure about those figures?

It appears to me that the increase in profit is reduced by half each week, which is logical, since costs are rising but markup is flat. Thus, after five weeks (five half-lives, OT), the increase in profits is statistically lost.

Good catch Shapley. It seems I incorrectly pasted the formulas going down that column. Here is the corrected data:

<img src="http://carlsoncm.tripod.com/gasrev1.jpg" alt=" - " />

So it seems our GSO is not making quite as much money as previously thought, but he is still making a profit significant enough for me to view the raising of the price based on his future cost to be a greedy endeavor.

[Shapley]

Hal,

Thanks. I should point out that, in your scenario, at the beginning of 12 weeks, or GSO is 17,750.49 in debt, where as in mine, he is debt free after ten weeks (dismissing the effects of interest, as you did).

I will take this as an endorsement on your part for maintaining debt as good for the GSO's economy, even if his debt is increasing weekly (deficit spending). I will also note that, given OT's stated support of your math, that he, too, supports maintaining debt.

V/R
Shapley

<small>[ 09-03-2005, 08:51 AM: Message edited by: Shapley ]</small>