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Why would they do that when one entity's losses can be used as a tax write-off for the other entity's profits.
by Bilal_io 4y ago
Why would they do that when one entity's losses can be used as a tax write-off for the other entity's profits.
- di4na 4y agobecause an option on a basket is worth less that a basket of options
- devoutsalsa 4y agoInvestors like profit and they like growth. The moment a business unit isn’t growing or profitable, you need to start justifying why you’re keeping it around. On the topic of write offs, losing money isn’t great unless it’s used to fuel obscene growth. You don’t spend $2 to save $1. The “we lose money on every sale, but make up for it on volume” model doesn’t work in the long run. More simply, a business is worth the value of all future cash flow, and it’s that simple.
- dragonwriter 4y ago> Why would they do that when one entity's losses can be used as a tax write-off for the other entity's profits. Because it's better to not have losses than to use them as tax write-offs (also, because basically every use of funds other than retaining profits is already a tax write-off for business, and the ones that aren't losses contribute to future profits.)
- Ekaros 4y agoLosing and investing money are different things. It's all fine for future to spend money on new warehouses, distribution hubs and better software. But there is expectation that this will at least increase revenue if not the profits. If it does not it is just waste that any company is better off with.