3 ms·
I get what you're saying, although my view is a little different. Where we agree is that it's key to measure the horsepower a company is contributing to society
by lpolovets 9y ago
I get what you're saying, although my view is a little different. Where we agree is that it's key to measure the horsepower a company is contributing to society. However, my perspective is that profit is a better approximation of that than revenue.[0] Revenue is often more reflective of input costs than value generated. For example, if you buy $900k of steel, spend $25k doing something to it, and then sell the resulting product for $1m, then how much value did you create? I'd argue that it's the profit ($75k) and not the revenue ($1m).
[0] That said, profit isn't a perfect metric either. By that measure, Amazon contributes almost nothing to society. Some combination of R&D reinvestment and contribution margins is probably a better metric.