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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Seeker of Truth who wrote (25116)5/21/2000 5:34:00 PM
From: Thomas Mercer-Hursh  Read Replies (1) of 54805
 
It seems to me that the direction, over time, in which these numbers move is very important.

Possibly so, but given the extremely different businesses they are in, the numbers are very hard to compare just as a slice in time across all these companies.

While I use numbers like this as a sanity check in my own fiscal planning, making comparisons to like companies, I'm not sure that I would want to read overmuch into this one figure without a lot of context. A rapidly growing company, for example, tends to be growing bodies ahead or behind the curve of sales growth, thus suppressing or enhancing this ratio. But the important issue is that the body count remain reasonably coupled to the sales growth, not necessarily which is leading. For some companies, the conservative approach of adding bodies behind sales is a fine way to go and insure not getting too cocky, but if one is trying to penetrate new markets, then one may need the bodies whether the sales are quite there yet or not.
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