[ajiang]

That's why you don't use revenue relative to profit as a metric, but various returns on invested capital as a metric, e.g. profit to debt, profit to assets, profit to capital expenditures, etc. Revenue is often a difficult figure to compare, as different companies in the same industry can record revenue in different ways depending on a multitude of factors (e.g. location in the value chain).

Put it more simply, if I have a business selling widgets and I need to invest $100 to start the business, it matters more what kind of profit I can get on that $100. If the widget I'm selling sells for $50 and I make $10 profit vs. sells for $500 and I make $10 profit, I'm still making $10 profit on $100 invested capital.

Now more often than not, I'd prefer to sell the higher margin product as it requires less working capital (such as inventory costs) which in itself has the 'cost of capital', but that's just the reality of some (fairly lucrative) industries you get into.

[rayiner]

> That's why you don't use revenue relative to profit as a metric, but various returns on invested capital as a metric, e.g. profit to debt, profit to assets, profit to capital expenditures, etc.

Sure, that's optimal, but they don't have that information easily accessible on Wikipedia for web debates...

I would be surprised if profits/revenues wasn't at least indicative of better measures like return on invested capital, at least for the companies in the above list.