Company Profits
Day 2,992, 17:54
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Published in Australia 
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by
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by Ilene Dover
I find myself at a loose end, briefly. At least until the KHMC decides to endorse my CP application or not...
Gudzwabofer is banging on about industry leading industry in this country. So, being a big fan of spreadsheets and making e-money I thought I'd share some insights.
Sorry in advance for the table formatting. My time isn't infinite and this has taken long enough already. I'll try and fix the format issues when I can.
These might seem blatantly obvious. Painfully obvious even. If so, I'm most very very sorry. Please feel free to ignore the article. I promise I won't feel bad. I won't even notice...like water off a duck's back.
First, some basic facts. This article will assume you are producing goods to sell on the market for CC using the work-as-manager function. We are interested in making a profit. The most profit we can for our investment, in fact.
Profit is simply defined. It is revenue from sales less production expenses.
Revenue is easy to work out. Multiply the price of the good being sold by the number of items you are selling. Simples!
Expenses are a little tricker. Work-as-manager needs the payment of Work Tax to treasury. That's 2.08 CC per company (whether Q1 or Q7) at the moment. Factories need Raw Materials. The exact amount is listed in the wikipedia. Best to look there if you're curious, I'm not in the habit of repeating things. Raw Materials cost money... We also need to allow for the cost of 10 energy/company used to work-as-manager. And lastly, VAT must be paid to the government. Unless you're selling Raw Materials.
VAT is a little tricker to calculate. It is not a simple case where under a 5% VAT, 95% of revenue goes to the seller and 5% goes to the tax man. Rather, from our gross sales we deduct: revenue/(1 + tax rate).
For the time being, I'm going to ignore the housing market and employees. That's an advanced topic that I can go over later if people are interested. So, weapons and food...
I'm also going to use the current cheapest market offer in eAustralia for calculating the revenue of each type of company. Because we have a small market, sometimes funky things happen. Our Q7 food is cheaper than our Q6 food, for example.
Enough blather, on with the answers Ilene!
Weapons Factories
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Company Type Q1 Q2 Q3 Q4 Q5 Q6 Q7 |
RM Price 0.70 1.40 2.10 2.80 3.50 4.20 140.00 |
Revenue (sales) 0.90 1.40 1.70 3.50 18.50 67.20 200.00 |
Energy Cost 0.55 0.55 0.55 0.55 0.55 0.55 0.55 |
Taxes 2.11 2.12 2.13 2.18 2.62 4.04 7.91 |
Profit/Loss -2.46 -2.67 -3.08 -2.03 11.83 58.41 51.54 |
Food Factories
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Company Type Q1 Q2 Q3 Q4 Q5 Q6 Q7 |
RM Price 8.00 16.00 24.00 32.00 40.00 48.00 160.00 |
Revenue (sales) 17.60 33.60 52.80 67.20 100.80 264 270.40 |
Energy Cost 0.55 0.55 0.55 0.55 0.55 0.55 0.55 |
Taxes 2.59 3.06 3.62 4.04 5.02 9.77 9.96 |
Profit/Loss 6.46 13.99 24.63 30.61 55.23 205.68 99.89 |
Weapons Raw Materials
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Company Type Q1 Q2 Q3 Q4 Q5 |
Revenue (sales) 2.45 4.90 8.75 12.25 17.50 |
Energy Cost 0.55 0.55 0.55 0.55 0.55 |
Taxes 2.08 2.08 2.08 2.08 2.08 |
Profit/Loss -0.18 2.27 6.12 9.62 14.87 |
Food Raw Materials
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Company Type Q1 Q2 Q3 Q4 Q5 |
Revenue (sales) 2.80 5.60 10.00 14.00 20.00 |
Energy Cost 0.55 0.55 0.55 0.55 0.55 |
Taxes 2.08 2.08 2.08 2.08 2.08 |
Profit/Loss 0.17 2.97 7.37 11.37 17.37 |
These results are probably completely unsurprising to you, dear readers. The expensive companies make more money. Duh...
But...I have, say, 350 gold to invest. It is better to buy 10 Q5 FRM companies? Or 35 Q3 FRM companies? For that, we will look at the monthly yield on an investment. For convenience, the current exchange rate of 1 gold = 380 CC has been adopted.
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Company Q1 Food Q2 Food Q3 Food Q4 Food Q5 Food Q6 Food Q7 Food Q1 Weapons Q2 Weapons Q3 Weapons Q4 Weapons Q5 Weapons Q6 Weapons Q7 Weapons Q1 FRM Q2 FRM Q3 FRM Q4 FRM Q5 FRM Q1 WRM Q2 WRM Q3 WRM Q4 WRM Q5 WRM |
Monthly Return (😵 5.10 5.26 4.01 2.34 2.04 3.75 1.16 -1.94 -.050 -0.15 0.44 1.06 0.60 -0.36 2.27 4.83 3.40 3.35 0.34 2.97 5.82 4.01 3.92 |
In conlclusion...
1. Lower quality food factories, and fisheries (Q3 FRM) offer the best returns on your investment. This is unsurprising, given our bonus structure.
2. You will make more money by building 21 Q1 food factories than a single Q5 food factory.
3. If WRM is your game, then stick to the Aluminium Mine (Q3 WRM). It's returns are close to the best that food and FRM can offer.
4. Unless you've got some non-profit motive, avoid weapons factories.
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Thanks. 🙂
If you use a spreadsheet and then post the images via another site, it comes out better (unsure if you doing it on your phone, but since you said you might edit it later on).
But good article never less, straight forward and too the point. I know when I start my industry empire building, I invested heavily in the raws as it was easier to turn a profit (plus cheaper and quicker then waiting to get all that gold for the Q7's), but now I have the Q7's and the food Q4s pumping out at a high volume, plus selling the occasional surplus WRMs on the Aussie market.
All in all, to be fully into factories, it is time consuming (almost 1yr and half for me), expensive and a lot of hard work, no matter which country you reside in. If you want to play around, as you pointed out the Raw's are great way to do so and you can still make a little bit of cash on the side. And these raw's will always sell as they can not be 'donated' to another player.
Yep, they're a lot of hard work. Building an economic base takes time and effort, just like building strength.
I don't like to SS my spreadsheets. They've got lots of other things on them that I'd rather not share. 😉
Oh if the KHMC wont endorse your CP app, come back to the RSU, we will endorse you and then you can leave afterwards if you want. The people have spoken and we want ID4CP \o/
Maybe that's the difference between us. 🙂
You see, if KHMC had decided to endorse someone else (or nobody) I would respect the decision and try again next month. Running behind the party's back to get my own way would just breed I'll feeling.
it has nothing to do with running behind your parties back. More the fact your the only one who has said something about policies and with 6 days left time is running out for the others to release an article and respond to any questions.
The RSU respects all candidates and if some want to run as an independent and the RSU believes that they would be good for our eNation, we will help them by proposing them. At the time of proposal it will be announced they are running as an independent.
I believe everyone has a right to run for CP if they think they would make a good leader, just because they dont belong to a party or one out of the top 5, it should not hinder them. As long as they can show good reasons to run and they get approval from the RSU, who are we to keep them down?
But it is good to see you finally nominated, I honestly believe you will do well (but am afraid that you will find out how stressful the job can be 🙁 )
Burnout and stress I can live with. I worry about my activity versus some impossible ideal...
(;,,😉
Great article. Clearly sets it out. You could mention the prices explicitly for future reference as this could be a good article to point people to, but otherwise I can't fault it.
From a glance it is easy to see that even with a Q7 price of $17, as it was recently, it would still be possible to make a margin of around $30 on each lot of 10. Obviously the investment payback would take longer. And as you say employees complicate the matter.
I look forward to the advanced classes. I wonder if we might be able to use links to articles like this as a MoF footer, or perhaps just one link to a regularly updated article which lists good didacticisms like this.
sorry that should say a margin of $20, I went a little dyslexic with the maths there.
Maybe. But you're spending around 650 gold in capital plus 140 CC a day in RM to make 20 CC profit. You're paying about 7.8 CC in taxes - around a third of your total revenue.
650 gold sunk into 65 Q1 food factories instead would make 400 CC more profit. And pay 150 CC more in taxes. Every day.
Why even bother?
Unfortunately you can update an old article, it will need to be re-released. From memory I can not remember the 'edit' time window, But maybe a better thing will have it linked to a gdoc, which can be updated with the use of the many external site tools that do the math for us.
Great idea. I'm sure it'd be doable with a bit of work. I'll put it on the to do list if I'm MoF next month.
You lost me when the columns didn't line up 😛
Really, that was quite a good update on what best to invest in. Markets do always change and I generally sit here thinking I should invest in more factories or farms then I realise I couldn't be bothered tracking the market to see if it has shifted and what is more viable.
More updates like this should be happening and I think every term the MoE should try to see peolle such as yourself, Gudz etc about doing up up quick costing or analysis of markets/productions (if you guys had sufficient time)
These types of articles really do help out newer players.
I've never understood why people find it so hard to do. Build a Google Sheet once. Plug in prices and tax rates when you're looking at an investment. Ignore it otherwise.
Maths is easy. There is (normally) only one correct answer!
Personally it is not difficult/hard but I find RL gets in the way and the amount of spreadsheet work I do elsewhere it just isn't justified, especially when there are people like yourself who enjoy the financial aspect in here and are obliging enough to produce the basis of a spreadsheet that gets others through
I can't understand those calculations.
Better use SS from this site:
http://www.erepublik-deutschland.de/en/tools/companycalc
Depends how much you trust others' work. 🙂
There are no calculations here. Just results, so people can see the answer. This way they can verify their own calculations. Or just bludge off mine.
Just for example:
-You set almost equal price to Q6 and Q7 food which is not true. Q6 food cost 0.7 cc
-How much is the pay back time for Q7 factory and I will assume that all information is based on working as manager only.
I did say that eAustralia gives some funky market numbers. And specifically mentioned that Q6 food actually cost more than Q7 food as I was pulling this article together.
Yes, all numbers are for WaN. This is also quoted in the article. 🙂
A Q7 weapons factory offers a yield of 0.6% monthly. 100/0.6=167 months. Over 10 years.
Good article.
Thanks. 🙂
Extremely helpful Ilene. I have to admit as a relatively new person to the game I've made a couple of bad gambles in regard to businesses which has seen me waste gold and currency.
Thanks for your effort in putting this together.
Happy to help. 🙂
The best returns on investment early on are the free training grounds. Each strength point is worth 1/250*5 = 0.02 gold through super soldier medals. So each level on the free training ground "earns" 0.1 gold/day. It's hard to go wrong, even at the top level! Just wait for a discount day to upgrade...