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Remedial Maths
Dear Editor,
It is the season of congratulations for high achievers of CXC, but I am teaching some remedial classes in mathematics and I began by asking the students what they did not understand from the past (Form 1) year of high school and would like to relearn. Among the things high on their priority was profit and loss and percentage profit. (I wish I had time to find out how many of them were children of businesspeople.)
The high school Maths textbooks[1] say:
Selling price – Cost price = Profit
Here is a sample problem. A business sells a commodity for $3,718 when the cost of producing it is $1,355. What is the profit? The answer is $3,718 – $1,355 = $2,363.
I chose those numbers because if they are each multiplied by 1,000,000,000, they correspond to what the Oil Companies declared in 2024. I chose 2024, because that is the latest annual report of the Natural Resource Fund (NRF) available on the Bank of Guyana’s and Ministry of Finance’s public websites. The NRF tells us how much profit Guyana is actually getting. For 2024, Guyana got $0.463 trillion profit while the Oil Companies got $2.363 trillion. This was more than 5 times Guyana’s profit.
I therefore wanted our Ministry of Education to explain how this is the 52% profit as declared on the ExxonMobil billboards instead of the (12.5% + 2% =) 14.5% of revenue it actually was (as correctly declared by GRA C-G Godfrey Statia [2]) so that even the top students in this country can understand. However, President Ali himself has at last heeded the calls after ExxonMobil officials announced that investment costs have been paid off, and redone the calculation. With cost recovery reduced to 20% (still an arbitrary number, but vastly more tolerable than the 75%), he has now correctly declared selling price as 100% revenue minus 2% royalty = 98%, and therefore profit as 98% – 20% = 78% of revenue. 50% of 78% is 39% of revenue, which, added to the 2% royalty, gives a total take of 41% of revenue.
Let us hope we do not have to wait a further 2 years to see this reflected in the NRF.
Yours sincerely,
Alfred Bhulai
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