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Revenue, profit, and the gap

Reading a Company

Two very different numbers

Revenue is everything that came in. Profit is what survived after costs, interest and tax. A company can grow revenue fast for years and never make a cent. When a headline celebrates 'record sales', the useful question is what was left at the bottom.

Check yourself

A company with soaring revenue and no profit is…

  1. Definitely a great investment
  2. Growing, but not yet proven as a business correct
  3. Losing customers

It may become excellent. Right now it has demonstrated demand, not viability.

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