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A comment on Back of the Envelope: How to Estimate the Annual Revenues of Any Private Company.

Re:Back of the Envelope: How to Estimate the Annual Revenues... by feral on Wednesday September 15, 2010 @10:05PM (#1696590)
This is complete rubbish and shouldn't have made HN. Is it even for real?

I mean, yes, IF your employees cost 100k/year on average, then you need (100k * number_employees) to break even. (Thats what 'average' means!)

So IF you break even, your revenue must be at least that. (thats what 'break even' means.)

But theres no information here! That's not a bound, or estimate of your revenue, its just the amount you need to pay your staff, if your staff have average salary.

This 'formula' makes no allowance for some companies having a higher average salary than others. It makes no allowance for some companies having a higher profit margin than others.

Nothing to see here; move along.

[ Parent | on HN ]
Re:Back of the Envelope: How to Estimate the Annual Revenues... by audiomicro on Thursday September 16, 2010 @05:50PM (#1699273)
it's an ESTIMATE! simply adjust upwards for industries where the average salary is over $40k. How about this....ANNUAL REVENUE = NUMBER OF EMPLOYEES X AVERAGE SALARY OF EMPLOYEES X 2.5 . Try it now.
[ Parent | on HN ]