The image on the right is a sidewalk billboard in the gay district of San Francisco. It is ostensibly trying to get the providers of AIDs drugs to lower their prices.
The main banner in the ad says ‘People before profits’. This is stupid in either of its English interpretations. Businesses generally depend on customers (people) to generate the net revenue the business needs to survive. That is a truism and a rather stupid subject for an ad since it is a truism. You need people to generate net revenue or profit. So?
The other meaning is that businesses should reduce prices at the expense of reduced net revenue. That is just pure stupidity. That may be OK for hobbies and government projects but it is not feasible to a business. No one goes into business just to cover expenses.
My take on this ad was at first to examine the issue of ‘profit’. Profit is a difficult bookkeeping item to pin down.
As an investor, I am interested in the net revenue after all expenses including real taxes. The technical line item I look at is EBITD. Which stands for Earnings Before Interest Taxes and Depreciation.
Meaning that what I am looking at relates to standard accrual bookkeeping as opposed to cash accounting. This measure is generally preferred because both Interest and depreciation are not necessarily paid expenses, they may be built into the price of a bond or the prices of assets bought and sold. Taxes can be related to previous or future earnings, since they carry forward and backward.
Finding the real ‘profit’ can be difficult to define.
In a small business it can be even more difficult. It does not mean net revenue after the owner, manager or proprietor is paid. The owner may be paying himself too little or too much. I have to estimate what the CEO of a similar small company would earn in the market. If the owner is paid much over the market price, then that amount is part of profit. If the owner is paid less (very common situation) then the profit is lower or doesn’t exist at all.
The same goes for many other owner’s expenses. Sometimes a small business is very generous with the owner’s expenses. Such as a limousine rental, luxury travel and a lavish party life. That can be part of ‘profit’. Deduct these 'in-kind' items from expenses to get actual profit.
The street poster can be seen as stupid in multiple ways, but for the meandering mind it can be stimulus.