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.
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.
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