> Funny tidbit. BP says they loose money on their gas stations, $100mil last
> year. You refine it, you transport it, you store it, you delivery it, and you
> sell it. How do you loose money when you control all aspects of it. Just by
> vertues of econmies of scale you have to make money.
I say (and show on my books) that I can get "X" to make and deliver to the
station product "Y". But, the station can only sell product "Y" for "X-$0.05".
Therefore, even though I know I made "X-$0.05", I state that I SHOULD
have been able to make "X" since that was the stated cost. Therefore, I
Typical business book-padding. You will find that padding at every step,
and on every ingredient, step in the process, movement, etc.
The way they pull that off is to have a "separate" company do each step,
and sell the product to another of their companies (i.e. to themselves) but
at a "fair market value" level (also set by themselves).
That way, they can claim business loss on their taxes for each step
and thus avoid paying taxes, but still have a large profit to pad their