Deceiving Big Revenues |
The question now is, how can one identify if the company is
indeed in good shape without pertaining solely on the company’s revenue?
The answer is simple, every company should have at least one
or group of people under the management consultant team. They analyses
organizational problems, they also develop plans for improvement. Their purpose
is also to help the organization or the business to improve its performance.
Also, before investing in a business which has a lot of
revenues, always try to dig deeper. Below are some lists of the things you need
to remember before investing:
1. Revenue and profit are not the same.
Between the two, you might want to check the profit instead
of the revenue. Simply because, revenue is just the straight sales while on the
other hand, profit is the money left after subtracting all the expenses.
2. Profit Margin.
You might also want to check the percentage of the profit
margin. This is the part of the revenue which is actually the profit. So the
higher the profit margin, the better. If the profit margin is way too low, then
it is not a good investment at all.
3. Large Purchases at once.
If there is
a need to by certain product, then buy it all at once. Why? So that the next
quarter profit will be much better. Also take into consideration of at least
checking your new and previous profits. This way you’ll be able to identify if
you are still on track, or if you’re earning more or less. You can also
identify if there is a graph that shows certain months which has high or low
profits.
Planning
your next step will rely on these results as well.
4. Revenue is not fixed.
This means
that, the revenue will not be always at its highest. There will come a time
where it can be lower than expected. Most often than not, the result of this
fluctuation depends on your decisions from the past. The more efficient your
decisions before the better now.
Yes, it is a
continuous cycle. You plan, decide, get the revenue and then it will happen
again. The only difference is that most precise and efficient decisions made
now can make a huge impact in the future.
The lists
above are just few of the things an entrepreneur or people who wanted to invest
in big revenue company, should take into consideration with. Research, Think
and Decide.
Elling Wirum is a Norwegian entrepreneur and businessman,
who presently holds the Chief Executive position in Fountain
Powerboats Scandinavian, a high-quality boat manufacturing industry based in
Oslo, Norway.