Valuation is people's best estimate of discounted future profits. It's true that the discount rate varies with macroeconomic changes, but rarely by as much as a

Valuation is people's best estimate of discounted future profits. It's true that the discount rate varies with macroeconomic changes, but rarely by as much as a factor of 2 over the last 20 years. When trying to express the long-term potential of a business, a factor of 2 is noise. You're lucky if you can get the number of digits right. MRR/YRR measures the business today, but the long-term prospects are more interesting. Number of employees or revenue/profit per employee don't measure business potential. Some huge businesses (Wal*mart) have low revenue/employee. Some small businesses (specialty consulting) have high revenue/employee.