From the course: Running a Profitable Business: Revenue Recognition

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Wrap-up

Wrap-up

From the course: Running a Profitable Business: Revenue Recognition

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Wrap-up

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- Lenders and investors want financial numbers to help them evaluate the value and financial strength of a company. - Sometimes, especially for startup companies, there really aren't many financial numbers to use. The companies have a short, or non-existent history, and their big startup costs create large reported losses that are not really useful in predicting future performance. - Revenue numbers are sometimes the only data available for evaluating a new company. - We categorize companies by the level of their revenues, this is a million dollar company, this is a hundred million dollar company, this is a billion dollar company. Usually, when we use this sort of terminology, we are talking about the amount of their revenues. - Now you've heard of the famous Fortune 500 listing? This is a list of the 500 largest companies in the United States, as identified by Fortune Magazine. And how does Fortune identify these 500 largest? By the amount of their reported revenue. - By increasing…

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