Revenue is up 11%. Volume is flat.

The same growth figure can describe four completely different businesses, and only one of them is actually growing.

By Steve 4 min read
Abstract bridge artwork for Revenue is up 11%. Volume is flat.

A board sees revenue up 11% and moves on to the next agenda item. It is a good number. It is also, on its own, almost uninterpretable. Eleven per cent could mean the business sold more, or charged more, or sold the same amount of a richer mix, or replaced departed customers with new ones bought at unknown cost. Each of those is a different business with a different set of problems, and the headline figure conceals all four. The decomposition is not hard. Most firms already hold the data…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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