3 ms·
This might be dense, but why would you measure net loss as a % of revenues? That calculation uses revenues twice, each $ of revenue reduces loss by a $. Surely,
by davidjgraph 13y ago
This might be dense, but why would you measure net loss as a % of revenues? That calculation uses revenues twice, each $ of revenue reduces loss by a $. Surely, it should be expenses as a % of revenue?
Edit : Sorry, I'm not asking what it is, I'm wondering why a trend in that particular metric points towards profitability, one day.
- deleted 13y ago[deleted]
- jackgavigan 13y agoIt was easier. The end result (in terms of projecting forward) is the same however you do it. PS: It's not dense, by the way - fair question. > Edit : Sorry, I'm not asking what it is, I'm wondering why a trend in that particular metric points towards profitability, one day. For the purposes of a "finger in the air" projection of when they'll hit profitability, it doesn't matter whether you use "Net Loss as a % of Revenues" or "Expenses as a % of Revenues" because, as you pointed out, Net Loss = [Expenses - Revenues]. The numbers are different (by 100 percentage points) but the general shape of the curve is the same. If you extrapolate the curve out, you get to break-even in 2015. It's completely unscientific. I'm basically pulling numbers out of my ass. I have an MBA, you see. ;-)