HOW IT WORKS
Example 2 – A supermarket turns over its perishable inventory every week. Its sales every week, to repeat customers, are $1 million. After paying operating expenses and taxes, the company earns a 3% net profit on $1 million. It repeats this buy/sell cycle for 52 weeks to the same customers. At the end of one year, the company will have earned $1.56 million on its original $1 million – a 156% a year return on its capital – WOW!
If $1 million were deposited in a bank at the rate of 2%, the interest earned would be only $20,000 by the end of 12 mos.
Only free market capitalism can create wealth in this way. Entrepreneurs, corporations and individuals can create wealth to benefit themselves, their employees and their communities.
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