3 ms·
Margins that low are dangerous because businesses can often see year to year margin variance higher than that.
by mike_hearn 4mo ago
Margins that low are dangerous because businesses can often see year to year margin variance higher than that.
- account42 4mo agoSo? Why is it impossible for businesses to do long-term accounting?
- refurb 4mo agoMany reasons: - Investors bail - You run out of cash
- lomase 4mo ago[dead]
- bluGill 4mo agoNot exactly - stocks are already sold, you don't run out of cash from the stock price going down. You only run out of cash if you want to sell more stock to raise more cash (this happens, but it is somewhat rare). However the owners are still going to be mad because their cash is down and they will demand changes to fix that.
- refurb 3mo agoI wouldn’t call issuance of new stock rare, it’s a major funding mechanism. Not to mention a company with thin margins is going to have a hell of a time raising money through debt.
- ChrisRR 4mo agoThey have been doing long term accounting, and that's why they're resetting their business
- chasd00 4mo ago> Why is it impossible for businesses to do long-term accounting? 3% is pretty close to 0% which is very close to -1%. Think of it as a 3% margin for error.