like it’s walmart according to wikipedia
In: 17
So imagine you have Jim and Bob.
Jim makes $100,000 a year
Bob makes $150,000
Jim’s bills cost him $50k every year and then he puts the other 50k in the bank. This is seen as revenue.
Bobs bills also cost him 50k. So naturally he should be putting 100k in the bank, right?
Wrong.
Bob takes that money and buys a new car for his business and all sorts of new assets like machines etc. it cost him 75k and he only put 25k in the bank.
The total revenue of jim is 50k. The total value of Jim is 50k
The total revenue of Bob is 25k. The total value of Bob is 100k.
There’s more nuance to it but that’s the gist. Buying assets is much more useful than just declaring profits
Latest Answers