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Is it really the case? Surely the development of this software package has its own very significant expenses, considering how much effort such a thing must take
by jhgb 4y ago
Is it really the case? Surely the development of this software package has its own very significant expenses, considering how much effort such a thing must take. What exactly are the annual revenue from selling this package and the expenses spent on working on it?
- ncallaway 4y agoDepend on which profit margin you’re using, but gross profit margin is revenue from a sale compared to COGS and wouldn’t include R&D
- jhgb 4y agoMy point was, if the company is getting $10k extra per sale but actually for example spending a total of $12k per sale, then arguing with these sales seems pointless if they're actually worsening the company's situation. At this point it seems far from certain that this is a net benefit for the company, other than perhaps as an investment in its future (but long-term investments in your future don't prop up your current profits).
- ncallaway 4y ago> but long-term investments in your future don't prop up your current profits This is exactly why gross profit margin typically excludes R&D, because the measure is usually used to see “is this business profitable on a per-unit basis”. That is, would you make profit if you decided to stop the long term investment.
- alkonaut 4y agoThe net gain from investing the car buyers money instead of investors/banks money must add up...