eli5: Why is it not good enough for a company to turn a profit, why do they have to hit “expectations”

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Headline after headline say that companies “failed” and/or didn’t hit “targets”, but when you look at the numbers, the company made profits, sometimes in the millions to billions, it just wasn’t “enough”.

Is this greed? Why is it not good enough to make a profit?

In: Economics

17 Answers

Anonymous 0 Comments

Someone else has covered the “why would people invest in your company when another company is doing better”, so I’ll add a few thoughts about the internal expectations as well.

You expected to make $5k from your job last month, as that’s what you’ve generally done the last couple of years, and you’ve grown in your skill set over time. You’ve even planned to invest in a new car – as you’re expecting what you had left after paying your regular bills.

Then you suddenly don’t hit what you expected. Everything you’ve done up to this point was based on hitting a certain number; your investments, future costs, etc. It doesn’t matter that you actually still made money and had money in your account after the month ended, but suddenly you can’t afford the investment in that car.

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