There is an article on the Internet titled "Where Did All the Money Made by Vanke Go?" It is a comprehensive of Vanke's business in the 12 years from 2011 to 2022, with a relatively small number of words but contains very rich information, which provides valuable materials for the writing of this article. However, since this article does not strictly explain the source of the material, and in most cases does not give the original data and processing methods, there is no guarantee of comprehensive rigor: if there are inaccuracies, this article is also inaccurate in the same place; If there is an error, the conclusions of this article are also wrong.
The bigger question is where all the money made by Vanke goes? In order to defend Vanke, the author has reached the point of ignoring economic common sense, even to bank capital or financial capital. This is much more serious than the lack of rigor, in fact, the author did explain the source of the data: "We mainly use the data in the annual report data from 2022 and before in the article", but it is more general, it is not impossible to check, but it is more laborious to figure out how the author synthesizes the data.
The problem of rigor is relatively easy to solve, but if there is a problem with the way of thinking, even if you have the exact material, you will not be able to see the reality clearly, let alone grasp the essence, and you may even make a joke: "Where did all the money made by Vanke go?" Some of the ideas in the book give me this feeling.
"First of all, how much money does the real estate company make, and what do you see?" The author believes that "looking at how much money is recovered from the sale of houses, just look at the cash received from the sale of goods and the provision of labor services in the cash flow statement, Vanke received a total of 3,479.1 billion yuan from the sale of houses in the 12 years from 2011 to 2022, which is the core money of real estate companies."
As you can see from the title of this article, I am writing about "Vanke's money" rather than "Vanke's money", and I think that Vanke's "cash received" minus some expenses is "Vanke's money". Next, the author of the article also began to take stock of these, indicating "Where did all the money go?" In order of the amount from most to the least, I have sorted out the author's classification of Vanke's expenses as follows:
"Vanke paid a total of 1,224.8 billion yuan to upstream and downstream enterprises in the 12 years from 2011 to 2022", which is "Where did all the money made by Vanke go?" the largest expenditure mentioned in the project;
"According to statistics, from 2011 to 2022, the amount of land acquired by Vanke is 23.7 billion yuan, 72.2 billion yuan, 87 billion yuan, 32.5 billion yuan, 68.4 billion yuan, 132 billion yuan, 218.9 billion yuan, 135.1 billion yuan, 161 billion yuan, 134.9 billion yuan, 127.4 billion yuan, and 24.1 billion yuan, totaling 1,217.2 billion yuan." At least there is no inconsistency in this part of the comprehensive, and the amount of land taken is roughly equal to the money paid to upstream and downstream enterprises;
"Vanke paid 464.7 billion yuan in taxes and fees from 2011 to 2022", "more than the sum of the payment of employees, dividends and banks", looking at the following quotations, it can be seen that these items add up to a total of 388.3 billion yuan, plus the total "formed fixed assets" is 441.3 billion yuan, which is still not as much as the "taxes and fees paid";
"Interest paid to banks": "Vanke paid 178 billion yuan to banks in the 12 years from 2011 to 2022, which is much more than the money paid to employees and dividends", see below is indeed the case;
"Taking Vanke as an example, in the 12 years from 2011 to 2022, it paid 119.7 billion yuan to employees, with an average annual salary of 125,000 yuan", with an average annual salary of about 10 billion yuan, so it is estimated that the average number of Vanke employees in the 12 years from 2011 to 2022 is about 80,000, which is generally consistent with the facts;
"Looking at Vanke, a major dividend, it has paid dividends of 90.6 billion yuan in 12 years."
Compared with the magnitude of Vanke's revenue, the total dividend of less than 100 billion yuan is not large;
"The fixed assets formed" and "the cash paid for the construction of fixed assets, Vanke only had 53 billion yuan in 12 years", which was the smallest among the various expenditures counted.
From the above collation results, it can be seen that "Where did all the money made by Vanke go?" Although the source of the data is not strictly explained, there is no inconsistency, and it does not lead me to draw an obviously incorrect conclusion: at least in my opinion, the author's treatment and calculations are largely credible. However, due to the problem of the way of thinking, some of the words written by the author are obviously sorry for the fruits of his labor.
The total amount of money given to upstream and downstream enterprises is more than one trillion yuan, which is the largest expenditure in the author's inventory, and the article's opinion on this huge expenditure is also quite problematic: "Many people say that real estate companies feed a bunch of upstream and downstream enterprises, and in fact they are. "I'm afraid that this is far from the case, and there is even a suspicion of reversing black and white in saying this!
Employees of other companies work hard, get up early and work late to provide products or services to Vanke; In this way, Vanke can sell the house at a good price, and Vanke's bosses can make a lot of money; And these employees only earn hard-earned money to maintain their lives, can it be said that the employees of these upstream and downstream enterprises are supported by Vanke? It's really not intentionally funny to say that "real estate companies are fed", it's just a defense of real estate giants regardless of common sense, unreasonableness, and unscrupulous means, but it really sounds like a joke.
Even from the perspective of upstream and downstream enterprises, Vanke and other enterprises are just ordinary transactions, and there is no question of who feeds whom. Is there an unfair trade? If there is, it can only be a giant enterprise like Vanke with tens of thousands or even hundreds of thousands of people taking advantage, and it must be other companies that are slaughtered, which is being fed by Vanke? It's not bad to say that Vanke is exploiting upstream and downstream enterprises!
Take a look at Evergrande, which is also a real estate giant, but has been thundering for a few years! If you don't pay back the money you owe, the company still exists, but the "upstream and downstream enterprises" are not as strong as Evergrande, and they can't get the tens of millions, hundreds of millions, billions, and tens of billions that should have been paid on time, and they are really going bankrupt. How I feel like I'm hearing jokes again! Wouldn't a similar situation happen to Vanke?
I can think so, it is related to reading an article called "Evergrande Creditor Ranking (II)", the first part of which "979.2 billion arrears from various suppliers" wrote: "Good guys, the whole is almost 1 trillion", "Many units originally wanted to make some money when they came in, but now they can't even recover the principal", "It is not an exaggeration to say that Evergrande alone will drag down hundreds of upstream and downstream companies to bankruptcy". It can be seen that even the author himself does not believe in the absurd statement that "real estate companies feed a bunch of upstream and downstream enterprises"!
In the author's view, it is fortunate that a real estate giant like Evergrande on the verge of bankruptcy has not "dragged down hundreds of upstream and downstream companies". But the "fan contributions" are defending these giants brainlessly, and the wrong position leads this person to ignore even the general common sense: The key is not how much is given, but how much is owed, no matter how much is paid between enterprises, it is a normal business, but if the money that should be given is not given, other enterprises will be dragged down when they reach a certain amount, no matter how much Vanke has paid, this situation is a drag rather than "feeding".
Perhaps Vanke's senior management had long expected that there would be problems in the company's operation, and it was said that in 2018 they said that they would "survive", but in 2019, they still spent 161 billion yuan to acquire land, and even in 2020 and 2021, the amount of land acquisition will still exceed 100 billion yuan. The amount of land acquired is really the bulk of Vanke's expenditure, and it can generally rank first with the money given to upstream and downstream enterprises, but in 2022, it will drop to a level that is not as good as a fraction of the previous years, and less than 1/5 of 2021.
I don't know if it affects Vanke's payment of taxes? Where did all the money Vanke make? Strictly speaking, Vanke's taxes and fees are not a big deal compared with the two items tied for the first place, but it is indeed more than the remaining items combined, which can be regarded as a relatively large head. This is understandable, and even should be divided, Vanke's development is inseparable from the support of the state, and a large amount of feedback should be given, otherwise, who will let the policy tilt towards real estate companies so that Vanke can successfully acquire land? Who will go to Vanke's neighborhood to build roads and subways to increase the price of houses? ……
It's no wonder that real estate giants aren't big taxpayers! That's how it should be, there is nothing to say, but doesn't Evergrande also owe a lot of taxes and fees? The fourth part of the article "Evergrande Creditor Ranking (II)" of "Mu Shi" is "106 billion in arrears of various taxes and fees", and the title has already explained how much Evergrande owes, even more than 100 billion; And the nature of Evergrande's tax arrears is very bad: "Looking at the situation now, it was clear that this tax was delayed as long as it could be, and there is no way to pay it until now", "profitable projects rely on non-payment of taxes and maliciously default on taxes and fees". Maybe Vanke doesn't have a similar problem, hopefully!
The amount of other categories where Vanke's funds go is relatively small, but these categories need to be compared together to see the essence of the problem. Where did all the money Vanke make? The author also knows to do this, and it is clearly written in the article: "Vanke pays the bank" and "this money is not much more than the money paid to employees and dividends". According to the data in the article, in the 12 years from 2011 to 2022, Vanke paid a total of 90.6 billion yuan in dividends and formed fixed assets of 53 billion yuan, which together amounted to 143.6 billion yuan, while the interest paid by Vanke to banks during the same period totaled 178 billion yuan, which was more than the sum of dividends and fixed assets.
"It's a bit too much to say that a real estate company works for a bank"? Even if it really says that "real estate companies work for banks", it hasn't been said yet! 1780/906=1.96, the interest is almost twice as much as the dividend, even if you think it is two jobs, it is not too much! When it comes to part-time jobs, it is a matter of employees, and the total salary of Vanke employees during the same period is 119.7 billion yuan, 1780/1197=1.49, and the interest is almost half more than the salary, which is indeed "much more than the money paid to employees and dividends".
Where did all the money made by Vanke go? In the 12 years from 2011 to 2022, the seven items of Vanke's expenses paid to upstream and downstream enterprises, the amount of land acquired, the taxes paid, the interest paid to banks, the wages paid to employees, the amount of dividends, and the fixed assets formed totaled 3,348 billion yuan. "In the 12 years from 2011 to 2022, Vanke received a total of 3,479.1 billion yuan from selling houses", 33480 / 34791 = 0.9623, it can indeed be said that "the above seven items add up to almost 96.2%", and the data in the article is still self-consistent.
It is already clear where more than 96% of the funds are going, and it is enough to have a rough understanding of Vanke's operation. But 34791-33480 = 1311, there is still 131.1 billion yuan is not clear, even if it accounts for less than 4%, anyone who sees it knows that more than 100 billion is definitely a large number, relatively speaking, it is more than 119.7 billion yuan in total employee wages for a total of 12 years, almost catching up with the sum of dividends and fixed assets of 143.6 billion yuan, the difference is so big that it is unacceptable: more than ten years of wages are paid again, or more than ten years of dividends plus fixed assets, Such a large deviation could not have been caused by chance.
Read through "Where Did All the Money Made by Vanke Go?" Later, I found that if you want to understand the whereabouts of more than 100 billion yuan, the key is still this article itself, and it is necessary to further comprehensively synthesize Vanke's business situation according to the text. In the top position of this article, after explaining the "core money of real estate companies", the author wrote: "At the same time, there are some pre-collected sincerity funds for house purchases and partner payments in 12 years, which have received 302.2 billion yuan in 12 years, and other cash flows paid by the company add up to 427 billion yuan. "What if you think about it?
In Vanke's non-core business, expenses are more than revenue: 4270-3022=1248, which is still 124.8 billion yuan, which is also more than 100 billion, which is roughly equivalent to the 131.1 billion yuan in the "most core money". It can be considered that these funds fill the gap in the non-core business, 1311-1248=63, and there is still a gap of 6.3 billion yuan, but it is much smaller than the previous inventory of Vanke's various expenditures.
It is the business of Vanke, and it is natural to consider the core and non-core together. So: in the 12 years from 2011 to 2022, Vanke received 3,479.1 billion yuan from selling houses, plus 302.2 billion yuan in advance during the same period, 34,791 + 3,022 = 37,813, Vanke's total income during this period was 3,781.3 billion yuan; As mentioned above, Vanke's seven expenditures totaled 3,348 billion yuan during the same period, plus 427 billion yuan of other cash paid during the same period, 33,480 + 4,270 = 37,750, and Vanke's total expenditure during this period was 3,775 billion yuan.
37750/37813=0.9983, the proportion of clear expenditure in Vanke's total revenue has exceeded 99.8%, and I know that this is very close to 100%. The original article gives a clear destination of the expenditure accounted for 96.2% of the "core money", almost 4% of the income from the sale of houses is unclear, after further synthesis in this paper, the total income is not clear about the whereabouts of less than 0.2%, the relative accuracy has also been significantly improved.
Of course, there is still a small amount of money that is not clear here, 37813-37750=63, generally speaking, 6.3 billion yuan is not a small amount. But where did all the money made by Vanke go? The least of the seven expenditures counted in this article is 53 billion yuan, and the money used to form fixed assets is also significantly more than the money whose whereabouts are unclear, with a deviation of 8.3 billion yuan by eight or nine times; Even if we do not consider the years when the expenditure on land acquisition was as high as hundreds of billions or even hundreds of billions of yuan, even in 2011 and 2022, the two years with the least expenditure, 23.7 billion yuan and 24.1 billion yuan were spent on land acquisition, which is three or four times that of 6.3 billion yuan. Inventory to this extent is accurate enough for general, non-professional understanding.
To summarize Vanke's business situation in the 12 years from 2011 to 2022: the total amount of money received from the sale of houses was 3,479.1 billion yuan, and the total income of 3,781.3 billion yuan was received in advance from the purchase of houses and the funds of partners. The various expenditures are arranged in order from large to small, with a total of 1,224.8 billion yuan paid to upstream and downstream enterprises, a total of 1,217.2 billion yuan of land acquisition, 464.7 billion yuan of taxes and fees, 427 billion yuan of other cash flows paid, 178 billion yuan of interest paid to banks, 119.7 billion yuan paid to employees, 90.6 billion yuan of dividends, 53 billion yuan of fixed assets formed, and a total of 3,775 billion yuan of various expenditures, which are basically equal to income.
Proportion of total income: the amount of money paid to upstream and downstream enterprises and the amount of land acquired are more than 30% and less than 1/3, and the sum of these two parts is more than 60% and almost 2/3; the remaining six items together are only slightly more than 1/3: the taxes and fees account for almost 1/8, and the other cash flow paid accounts for almost 1/9; interest, wages, dividends, and fixed assets together account for only 1/8 to 1/9: the interest does not exceed 5%, the salary is slightly more than 3%, and the dividend is less than 2.5%, Fixed assets are less than 1.5%, and the smallest two combined are less than 4%. After this inventory, the whereabouts of Vanke's total income are clearer.
It is not that the proportion of expenditures is not noteworthy, but the total expenditures, the relationship between the various expenditures and the relative size of the expenditures are extremely rich in political economy and social significance, and it is worth writing another article to discuss them in detail.
In fact, the more you know about the companies in the market now, the more you will feel that entrepreneurship is a good thing, because too many entrepreneurs do not have this valuable thing. Entrepreneurship is an entrepreneurial behavior that can affect the development of an enterprise, and whether a business grows depends on the entrepreneurial spirit.
In this world, there are many people who own businesses, but there are not many who can be called "entrepreneurs"; This is especially true in China, where there are "businessmen" everywhere, but there are no entrepreneurs.
So, what kind of person is an entrepreneur? How does a good entrepreneur run a business? This is actually difficult to explain in one sentence, but it is definitely not a chicken feather like Vanke anyway.
We can start by understanding entrepreneurship, without understanding entrepreneurship, it is difficult to understand how far we are from business civilization.
To this end, I sincerely recommend Mr. Zhang Weiying's "Re-understanding Entrepreneurship". This book is not only the economics that exists in theory, but the economics of the real market, and the author can always give sharp arguments and paths to the core of the problem. These theoretically grounded and realistic analyses are needed not only by decision-making entrepreneurs, but also by any general reader who wants to understand real market and economic development trends.
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Author: Zhuang Zhuang; Date: May 1-5, 2024.