You have sales. Like...18 million bucks worth of parrot cages with tiny parrot-swear-words engraved in the railing ("Polly wants a ******* cracker").
To buy the wire, the base, then the labor to mold and tie it all together...in total, that part cost you 8 million bucks, so you have 10 million in gross profit and 10 over 18 in gross margin.
So what's adjusted then about this margin? Curveball expenses and ambiguous sales. Like...you find out 90 days later that 5 percent of the cages were returned because Polly crawled out, so sales weren't really 18 million. More like 17 million or thereabouts. And the wire for the cages? It had lead in it. You dumped. And then you were fined by the garbage company 500 grand, so your expenses in delivering that product were more like 10.5 mil instead of 10.
Adjusting gross margin is what keeps the asterisk factories alive in this country. Each adjustment has to be noted in painful detail, because Polly really does want that ******* cracker.
Related or Semi-related Video
Finance: What is marginal revenue?54 Views
finance a la Shmoop what is marginal revenue well it's that last dollar the [money racing to the finish line]
last sale of a Sunday at baskin-robbins before the year closes at midnight on [ice cream sale]
New Year's Eve it's that last flying car sale
you made it at 11:58 p.m. as the ball was dropping in Manhattan sold it for a [ball floating in space]
hundred grand even felt different from the first car you sold this year why
well because from an accounting perspective it had already been built
shipped Frette painted with that new flying car smell smell yeah and the [flying with air freshener]
revenue had generated was likely meaningfully more profitable or at least
from an accounting perspective then the first car sold why well because so many
of its costs had already been accounted for or paid for or amortized on the [clip board check list]
books that factory that stamped out its last product for the year already had a
year's worth of high use behind it amer tizen the cost of the factory and
everything that went into winning that last marginal dollar of revenue so that
from an accounting perspective to make the first sale of that flying tesla for
a hundred grand well that cost a lawn and company like a billion dollars to
make the millionth test and sell it for a hundred grand well as it was
completely made by the robots a you know cost Elon in company only about 20 grand
like way higher profit margins the key concept to worry about when you think
about marginal revenues is the marginal contribution to profits which that last
dollar brings to the bottom line party anyway we hope you got something out of [dollars meeting together]
this video it's probably one of the last ones not to be made by robots least
around here
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