Big companies do this on purpose. They want their earnings and their expenses to match up as close as possible, because companies don’t pay any taxes on money spent on making money, only on profits. So if a giant company is in the red, the vast majority of operating expenses are tax deductible
I’ve worked for two successful startups and they also tried really hard to break even every year, for the reason you’re mentioned. The thing their investors wanted to see was revenue growth, not profits. As revenue grew they would hire more people to use up the money.
It’s also hard to turn a profit. People think running a company is easy. It’s not. Employees, health care, etc all add up.
Hell when we sell software, it takes a few years to break even on it and our margins are 95%+.
Out ceo doesn’t care about paying taxes. Most don’t. They’d rather be profitable but that’s a tough goal to achieve on a consistent basis.
Big companies do this on purpose. They want their earnings and their expenses to match up as close as possible, because companies don’t pay any taxes on money spent on making money, only on profits. So if a giant company is in the red, the vast majority of operating expenses are tax deductible
I’ve worked for two successful startups and they also tried really hard to break even every year, for the reason you’re mentioned. The thing their investors wanted to see was revenue growth, not profits. As revenue grew they would hire more people to use up the money.
It’s also hard to turn a profit. People think running a company is easy. It’s not. Employees, health care, etc all add up. Hell when we sell software, it takes a few years to break even on it and our margins are 95%+. Out ceo doesn’t care about paying taxes. Most don’t. They’d rather be profitable but that’s a tough goal to achieve on a consistent basis.