> That's stark raving mad. It is for example one of the clearest signs someone is running a Ponzi scheme.
Not really - I mean, if I run Toyota should I not be producing cars I can sell at a profit? And if my sales are falling, isn't that a bad thing?
Rising sales are good, of course - but not oscillating sales. If the rise is going to be followed by a sales slump in a few months time, do I want to take on extra staff who I'll then have to lay off, causing them untold strife and inconvenience? Do I want to build a new factory full of expensive machines, then have them stand idle while costing me interest and rent?
Industries like Software and IP licensing are, of course, often a different matter!
"Not really - I mean, if I run Toyota should I not be producing cars I can sell at a profit? And if my sales are falling, isn't that a bad thing?"
Yes to both. Maybe I'm misinterpreting the concept. "Steady" to me in this context means the same, thus financial shenanigans to make sure you don't report "excess" earnings in one period so you can have them in reserve for a future one where you have a slump.
"Regular" profits are ideal, but Toyota today is not a good example, it's a mature company in a country with a mature automobile industry. As a counter example, see the story sold to the investing community about Amazon, not that they would make a steady profit, but that they would become huge and then do something like that. Which they've delivered on (and I wouldn't judge them on anything in the COVID disruptive period 2020 to now).
Not really - I mean, if I run Toyota should I not be producing cars I can sell at a profit? And if my sales are falling, isn't that a bad thing?
Rising sales are good, of course - but not oscillating sales. If the rise is going to be followed by a sales slump in a few months time, do I want to take on extra staff who I'll then have to lay off, causing them untold strife and inconvenience? Do I want to build a new factory full of expensive machines, then have them stand idle while costing me interest and rent?
Industries like Software and IP licensing are, of course, often a different matter!