5 ms·
You’re not “framing the risk in terms of profit.” You’re talking about a set of equations in your head, that only you know, that come up with weird results like
by an_opabinia 5y ago
You’re not “framing the risk in terms of profit.” You’re talking about a set of equations in your head, that only you know, that come up with weird results like “it takes way more revenue to ‘offset’ an expense” because you’re holding “net” or “gross” or whatever margin constant. Which is really confusing and surprising and not how anyone I’ve ever met talks about this stuff, and they’d be equally puzzled and I don’t think would experience an illuminating or aha moment or whatever.
Personally I found it a little interesting, I get what you are going for, but it’s so strange and not really useful or true.
- indymike 5y agoI think you are looking for deep insight and the point that was being made was shallow. If I make $3000 in profit, at 30% margin, I have to have $10000 in sales. It follows that if I have an unexpected expense of $300, it will require $1000 in sales to have generate enough profit to cover the expense.