You can tell a lot about a company by how they report their results:
Some companies focus on the actual values (size):
“We made a net profit of $15 million.”
Some companies focus on the first derivative (growth):
“Revenues increased by 9%.”
Some companies focus on the second derivative (acceleration):
“We added 100,000 new customers in the last year, 70,000 of these in the last two months.”
There is a time and a place for each. But you can often take your pick, depending on the spin you want.
For example … Skype
This graph from GigaOm showing quarterly revenues:
http://gigaom.files.wordpress.com/2009/01/skyperevenues.gif
The headline in this case was: “Skype’s growth starts to slow” (acceleration, or in this case deceleration).
It could just have easily been “Skype reports record revenue of $145m” (size) or “Skype increases revenue by 26% compared to the same period last year” (growth).
To get the full picture you probably want to know all three.
[...] Size vs Growth vs Acceleration (Rowan Simpson) — you can tell how well a company is doing by the basis on which they report their progress. [...]
Some smart observations Rowan. It is always interesting to note how organisations avoid reporting profit, which apart form having a comfortable cash-flow, is the most important number.
[...] Size vs Growth vs Acceleration (Rowan Simpson) — you can tell how well a company is doing by the basis on which they report their progress. [...]
[...] the first derivative is the explanation in this [...]