Over the last few weeks Westpac, NAB, ANZ collectively reported profits of $20.8 billion dollars. This resulted in some commentary in the press about banks being too profitable, especially in light of moves to recent moves to reprice loans upward for both investors and owner occupiers. Whilst large corporations generate large profits in dollar terms; what is often ignored in much of the debate on corporate profitability is that these profits have to be shared amongst millions of individual shareholders. For example Commonwealth Bank has almost 790,000 individual shareholders with 1.7 billion shares outstanding, all of which have a claim over the $9.1 billion in cash profit that the bank reported in August. In this piece we are going to look at different measures of corporate profitability for large Australian listed companies, looking beyond the billion dollar headline figure.
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