Even though it clearly states that a decrease in profits is due to either lower revenues, higher costs or both, I struggle to apply this logic. More precisely, once the situation changes i.e. increase in profits, flat profits etc. I tend to struggle a lot. How can I improve this?
Somehow I run into a dead end with thinking about "if scenarios of profitability cases (e.g. profits down, revenues etc." The more I think about it, the more confusing it becomes. I know there must be a simple yet powerful logic behind it all...
Can someone explain for example why stagnating profits imply that revenues have been flat, or costs increased or both? Imho profits chan be stagnating also when revenue and costs decrease by the same amount.
Also I have problems when to look at profit margins and when to know the problem can be solved without looking at profit margins.
Help is very welcome! I hope someone understands what I mean with the whole problem above.
Thanks a lot.