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> Western companies tend to look at the ROI as a percentage, while Chinese businessmen at the actual profit amount.

Warren Buffett is actually pretty famous for optimizing for "free cash flow".




Any CFO worth its money would tell you to optimise for free cash flow. As my ex CFO used to repeat (and we were working for big co tm).

"Cash is King". She tought ne a lot.

Also RoI is a measure of time. Not money or profit. Time until you get your money back.


No, it's not "Time until you get your money back."

Here's a link: https://www.investopedia.com/terms/r/returnoninvestment.asp

ROI = Return on Investment. Most people in practice calculate that in excel as a percentage of profit over their capital investment.

Smart business people know there's more important things than a dimensionless number, but hey, Peter Principle and "math is hard." See Black-Scholes and the 2008 recession for how wrong that can go.

https://en.wikipedia.org/wiki/Black%E2%80%93Scholes_model

I used to do math tutoring for economics students. Boy, that was an eye-opener! I had to explain over and over what independent variables meant, and how that affected for example derivatives. As bad as p-hacking and the social sciences.

Econ Student: "Can I just plug these lists of numbers in the formula and write down the answer?"

Me: "What are the numbers measuring? Are they independent?"

Econ Student: "No idea."




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