Understanding ratios is essential to unlocking deeper insights into your online business’s well being and driving smarter decision-making
Think about you’re a farmer with two apple orchards. Someday, you determine to depend the apples in every orchard. Orchard A has 1,000 apples, whereas Orchard B has solely 500. At first look, it looks like Orchard A is the clear winner. However what if I advised you that Orchard A has 10,000 bushes, whereas Orchard B has solely 500? All of a sudden, Orchard B doesn’t look so dangerous, does it?
That is the ability of proportions. In enterprise, as in farming, uncooked numbers will be deceiving. To actually perceive the well being of your online business, you must take a look at proportions.
You might be most likely taking a look at absolute numbers every single day, e.g. your online business has made $10K in income this week. There are 250 clients who positioned orders in the present day, whereas it was 200 yesterday and 100 on the identical day final week and so forth.
Proportions, however, are just like the high-quality print. They may not be as instantly eye-catching as absolute numbers, however they supply a extra correct image of your online business’s well being.
Take revenue margin, for instance. This can be a proportion that compares your revenue to your income. A excessive revenue margin signifies…
