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well, they're looking at earnings growth, not profit margins. You could have a company that increases profitability YoY and not grow revenue as well. It's les
by VirusNewbie 2y ago
well, they're looking at earnings growth, not profit margins. You could have a company that increases profitability YoY and not grow revenue as well. It's less typical, but certainly possible with technology companies. I think this paper misses that fact.
- nine_k 2y agoThis is fair. But the theoretical maximum of profitability is 100% of revenue. A company that increased their revenue 10x while keeping the same 10% profit margin (both numbers quite normal) achieved the same profit as if it kept the revenue the same and grew profitability to 100% (pure fantasy). Also, larger streams of money create the economic multiplier effect.