[axel77]

Originally Posted by DMcCunney

Nope. The bigger you are, the bigger X needs to be, and the bigger the return needs to be.

As said, the first conlcusion is correct, the second is IMHO not.

Of course every company wants to make as much profit as possible. Its just not correct that the larger the company is, the more profit it must do per dollar invested.

(General Electric was known for buying and selling entire large companies to produce the steady revenue and profit stream the market expected.)

General Electric... ooook..... The whole fusioning and splitting job is btw. a product that diffrent sizes companies are differently rated at the stock market. So you can make money buy merging or splitting companies. You can watch "bodyguard" to see richard gere doing this as job

Semiconductor electronics is the classic capital intensive business. There are huge upfront costs in creating the capability to make the products. The biggest portion of the cost of a unit will be the overhead of the financing required to make it. The more you can make, the more you can spread the overhead, and the lower your units costs, and higher your profit on each unit will be.

This is Finance 101.

thanks for explaining me financing 101, we'll I actually did that much financing already. What you descrive is total return on investment. Yes ROI will increase the larger the production is. "economies of scale". However I still disagree that larger companies have a larger ROI than smaller. This is just not true.

As long any investment (including management expenses) has a larger ROI than the market interest loan any company will want to do that, big or small. Since it can get the investment needed from the finance market.