Revenue Is For Vanity
I know companies.
Revenue is for vanity. As a stand alone indicator in your business it is not necessarily an indication of a healthy business. We are talking about did you ever hear the expression revenue is vanity profit is sanity but cash is king exactly. All revenue is not equal. Revenue is for vanity profit is for sanity and cash flow is everything.
You would rather have a 100 million dollar business that makes 20 million instead of a 1 billion dollar business. We have to look at both margin and the cost of generating that revenue. Revenue is only the bluntest of instruments when it comes to measuring business health. Revenue is for vanity profit is for sanity.
I m going to ask you a few questions here just to discuss it. People get fixated on that figure because it is the largest one since it has not yet been reduced by various costs and expenses and also the simplest one to calculate. One of the biggest mistakes made is focusing only on the top line i e. You couldn t have said it better myself.
I m not a financial professional or accountant i like simple explanations revenue is the money coming in from the sales of your products and services.