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My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate?
On further thought, I suspect "should equal" should be "should equal or exceed".
Your annual revenue growth rate + your operating margin should equal 40% My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate? On further thought, I suspect "should equal" should be "should equal or exceed".
I also don't really understand why having a higher margin is useful in a declining business. It's either a lost cause or one should be reinvesting in reversing the growth problem, no..?
Your annual revenue growth rate + your operating margin should equal 40% My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate? On further thought, I suspect "should equal" should be "should equal or exceed".
I wondered that as well as I'm in the same situation, but then I wondered if it works as a target if it means we should be spending more on staff and reinvestment to grow even more? But that'd mean the %age gets even higher so.. maybe not ;-) I also don't really understand why having a higher margin is useful in a declining business. It's either a lost cause or one should be reinvesting in reversing the growth proble…
Your annual revenue growth rate + your operating margin should equal 40% My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate? On further thought, I suspect "should equal" should be "should equal or exceed".
Earlier quoted context omitted.
I disagree, in personal finances you aren't afforded the same kind of burn rates because there isn't an investor model for individuals. If my salary has increased 100% YoY for the last 3 years, I would be in a troubling amount of debt. This applies in reverse as well, if you take a salary cut you likely aren't going to be able to save more money as a result. For personal finances I think its better to tease out a bas…
This is exactly what people do when they go to school: they take on huge amounts of debt in order to make their income grow by >100% YoY for a few years. Very few incoming college students know enough about finance or exactly what different choices will payout to make smart trade-offs in this area, but this reasoning is pretty common with MBA and Law School students. Occasionally it even works; I've known a few young…
You also have to keep in mind that most people who finish law school don't get big law jobs that allow them to pay off loans quickly. The same holds true for MBAs and most PhDs. About the only advanced degree that has some level of income guarantee (for now) is a MD. So while school can fit the 40% rule, it rarely does.
Earlier quoted context omitted.
Banks invest in individuals by offering loans.
Loan = Investment?
Bonds and equity are also considered investments, but the latter is corporate ownership, not debt (which you may be confused about).
Your annual revenue growth rate + your operating margin should equal 40% My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate? On further thought, I suspect "should equal" should be "should equal or exceed".
Your annual revenue growth rate + your operating margin should equal 40% My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate? On further thought, I suspect "should equal" should be "should equal or exceed".
Earlier quoted context omitted.
I disagree, in personal finances you aren't afforded the same kind of burn rates because there isn't an investor model for individuals. If my salary has increased 100% YoY for the last 3 years, I would be in a troubling amount of debt. This applies in reverse as well, if you take a salary cut you likely aren't going to be able to save more money as a result. For personal finances I think its better to tease out a bas…
Not sure why this won't still work in theory. 100% YoY increase: Salary Year 1: $100 - you are allowed to go $60 into debt Salary Year 2: $200 - you are allowed a further $120 Salary Year 3: $400 - you are allowed a further $240 Salary Year 4: $800 - your total debts are still around half a year's salary, which is only modestly troubling - banks would most likely be happy to service your debt at a competitive rate. I…
Your annual revenue growth rate + your operating margin should equal 40% My immediate reaction: So I guess I need to cut Tarsnap's prices and slow its growth rate? On further thought, I suspect "should equal" should be "should equal or exceed".