Chart: What Does it Cost to Run Big Business?
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What Does it Cost to Run Big Business?

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The cost to run big business

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The Briefing

  • The cost of running a Fortune 500 company can easily exceed $100 billion annually
  • Walmart’s operating costs in 2020 were equal to 70% of U.S. military spending

What Does it Cost to Run Big Business?

How much does it cost to run one of America’s largest corporations? For household names like Apple, Costco and Walmart, well over $100 billion each year.

To get a better sense of their massive scale, this chart compiles financial data from some of the largest Fortune 500 companies, and includes U.S. military spending as an additional point of comparison.

EntityCost of Operations, USD billionsRevenues, USD billionsOperating Margin, %
U.S. Military Spending$778N/AN/A
Walmart$537$5594%
Amazon$363$3866%
Apple$170$27538%
CVS Health$255$2695%
Berkshire Hathaway$231$2466%
Alphabet$142$18322%
ExxonMobil$210$182-15%
AT&T$165$1724%
Costco Wholesale$161$1674%

To determine each company’s total cost of operations, we combined its selling, general & administrative expense (SG&A) and its cost of goods sold (COGS).

SG&A covers all of the costs associated with selling products and services, as well as managing day-to-day operations. This includes employee salaries, office rent, and marketing expenses. COGS refers to any costs directly associated with producing goods, such as raw materials and labor.

Operating Costs vs. Military Spending

At $778 billion, U.S. military spending in 2020 was the highest in the world. It dwarfs that of China, which took second place with $252 billion in spending. Beyond these two, there are no other countries that spent more than $100 billion on defense.

Massive government budgets like this may seem untouchable, but today’s chart proves otherwise. As the largest employer and retailer in America, Walmart spent $537 billion (70% of U.S military spending) to keep itself running.

Combine this with Amazon’s operating costs, and we reach $900 billion in expenses (16% more than U.S. military spending).

More Costs Doesn’t Mean More Profits

These businesses may be expensive to run, but how good are they at making money?

This can be measured by operating margin, which determines how much profit is generated from each dollar of revenue, after operating costs are deducted. We calculate it with a simple formula: operating earnings divided by revenues. Operating earnings are revenues less SG&A and COGS.

From the companies in this graphic, Apple had the greatest operating margin at 38%. Walmart was at the opposite end of the scale with a 4% margin.

This highlights the differences in business strategy. Walmart’s competitive advantage is cost leadership, meaning it strives to beat its competitors by offering the lowest prices possible. The retailer’s sheer scale (4,743 locations across the U.S.) is what enables this strategy to be effective.

Apple, on the other hand, combines strong branding and premium quality to command a high price for its products. This results in greater margins and valuations—at the time of writing, Apple is the world’s most valuable corporation with a market cap of $2.4 trillion.

Where does this data come from?

Source: SEC (2021), SIPRI
Notes: Cost of operations includes selling, general & administrative expenses (SG&A) and cost of goods sold (COGS).

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Visualizing the Five Drivers of Forest Loss

Approximately 15 billion trees are cut down annually across the world. Here’s a look at the five major drivers of forest loss. (Sponsored)

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The Briefing

  • On average, the world loses more than 20 million hectares of forests annually.
  • Agriculture and commodity-driven deforestation each account for approximately a quarter of annual forest loss.

Visualizing the Five Drivers of Forest Loss

The world has lost one-third of its forests since the ice age, and today, approximately 15 billion trees are cut down annually.

Forests are wellsprings of biodiversity and an essential buffer against climate change, absorbing billions of tonnes of carbon dioxide emissions every year. Yet, forest loss continues to grow.

The above infographic sponsored by Carbon Streaming Corporation highlights the five primary drivers behind forest loss.

Deforestation vs. Degradation

‘Forest loss’ is a broad term that captures the impacts of both permanent deforestation and forest degradation. There is an important distinction between the two:

  • Permanent deforestation: Refers to the complete removal of trees or conversion of forests to another land use (like buildings), where forests cannot regrow.
  • Forest degradation: Refers to a reduction in the density of trees in the area without a change in land use. Forests are expected to regrow.

Forest degradation accounts for over 70% or 15 million hectares of annual forest loss. The other 30% of lost forests are permanently deforested.

Driving factorCategoryAverage annual forest loss (2001-2015, million hectares)
Commodity-driven deforestationPermanent deforestation5.7
UrbanizationPermanent deforestation0.1
Forestry productsForest degradation5.4
Shifting agricultureForest degradation5
WildfiresForest degradation4.8
TotalN/A21

Commodity-driven deforestation, which includes removal of forests for farming and mining, is the largest driver of forest loss. Agriculture alone accounts for three-fourths of all commodity-driven deforestation, where forests are often converted into land for cattle ranches and plantations.

The harvesting of forestry products like timber, paper, pulp, and rubber accounts for the largest share of forest loss from degradation. This process is often managed and planned so that forests can regrow after the harvest.

Shifting agriculture and wildfires each account for around 5 million hectares or one-fourth of annual forest loss. In both cases, forests can replenish if the land is left unused.

Urbanization—the conversion of forests into land for cities and infrastructure—is by far the smallest contributor, accounting for less than 1% of annual forest loss.

How Much Carbon Do Forests Absorb?

The world’s forests absorbed nearly twice as much carbon dioxide (CO2) as they emitted between 2001 and 2019, according to research published in Nature.

On a net basis, forests sequester 7.6 billion tonnes of CO2 equivalent (CO2e) annually, which equates to around 15% of global CO2e emissions. As the impacts of climate change intensify, protecting forests from deforestation and degradation is increasingly critical.

Carbon Streaming Corporation accelerates climate action through carbon credit streams on REDD+ projects that protect the Earth’s forests. Click here to learn more now.

Where does this data come from?

Source: Our World in Data

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Ranked: Top 10 Foreign Policy Concerns of Americans

As the world’s superpower, the U.S. has major influence in world events. Which foreign policy concerns stand out for Americans?

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america's foreign policy

The Briefing

  • Political leanings aside, terrorism remains a top issue of concern for Americans
  • Previous top issues, such as disinformation and U.S.–China relations, now rank lower

In the United States, there is a distinct difference on top foreign policy concerns between Democrats and Republicans.

This chart uses data from Morning Consult to assess the top policy concerns of Americans.

The Top Concerns

Overall, the average American is most concerned about terrorism, immigration, and drug trafficking. Interestingly, this list corresponds with the concerns of the average Republican, though falling in a different order.

Meanwhile, Democrats are chiefly worried about climate change, another global pandemic, and terrorism.

Here’s a breakdown of the policy concerns at large and across political parties.

Overall Rank with AmericansForeign Policy ConcernShare of Voters Listing it as a Top ConcernShare of Democrats Listing it as a Top ConcernShare of Republicans Listing it as a Top Concern
#1Terrorism49%38%62%
#2Immigration43%22%67%
#3Drug trafficking43%30%59%
#4Cyberattacks39%35%40%
#5Climate change38%54%17%
#6Preventing a global economic crisis32%33%31%
#7Securing critical supply chains30%27%34%
#8Preventing another global pandemic30%38%22%
#9Russia's invasion of Ukraine27%33%21%
#10Protecting human rights globally25%31%18%
#11Preventing disinformation24%29%21%
#12U.S.-China relations24%19%31%
#13Iran nuclear deal21%19%24%
#14Upholding democracy globally15%22%8%

Notably, the concern around U.S.-China relations ranks considerably low, as does preventing disinformation. Upholding democracy worldwide ranks extremely low with Republicans.

America’s Foreign Policy

Along party lines, the results are not surprising. Democrats skew towards multilateralism and want to engage with foreign bodies and other countries to tackle global issues. Republicans are generally more concerned with what’s happening at home.

Looking at the country as a whole and its relations with other nations, however, Americans lean more towards an America-first focus. According to Morning Consult, 39% of registered voters want to decrease U.S. involvement in other countries’ affairs, whereas 20% want to increase it; 30% want to keep the status quo.

Here’s a closer look at Americans’ desire to get involved in a variety of foreign policy initiatives:

IssueIncrease EffortsDecrease EffortsNeither
Overseas Troop Deployment21%37%30%
Trade and Tariffs41%15%29%
Involvement with International Organizations35%21%32%
Resolution of Military Disputes38%16%33%
Resolution of Economic Disputes43%13%31%

As of October 2022

The U.S. Midterm Elections

With midterm elections underway, America’s foreign policy may not be the most important factor for voters. Pew Research Center found that in these congressional elections, foreign policy only ranked 12th among other key issues considered “very important” by registered voters.

The top five concerns of voters in these midterms are:

  1. The economy
  2. The future of democracy within the U.S.
  3. Education
  4. Healthcare
  5. Energy policy

Regardless, the U.S. has a massive impact in foreign affairs and the results of the country’s midterm elections will likely cause a ripple effect globally. If Republicans win the House—which is looking extremely likely—and the Senate, President Biden’s foreign policy initiatives and priorities could be drastically restricted.

Where does this data come from?

Source: Morning Consult

Data notes: This ranking is made using the share of registered U.S. voters who identified the given issue as a top 5 concern for the country. For example, only 30% of registered voters said securing critical supply chains was a top 5 concern which is why it’s #7, whereas 43% said immigration was a top concern, ranking it at #2.

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