Revenue Is Vanity. Margin Tells the Real Story.
Revenue says how much came in — margin tells you how much stayed. Why business owners should watch both, with simple examples.
"Sales are up" is the most quoted number in business — and often the least useful one on its own.
Why Revenue Alone Misleads
- Revenue says how much came in — not how much stayed
- A business can grow revenue while margins quietly shrink
- Discounting, rising material costs and untracked variations can all eat into profit
A Simple Example
- Business A: S$200,000 revenue at a 30% margin
- Business B: S$300,000 revenue at a 10% margin
- Business A earns more profit from fewer sales
What Margin Tells You
- Whether pricing is working
- Whether costs are under control
- Which jobs, projects or product lines are actually worth doing
Monitor Both — Decide on Both
Revenue shows momentum. Margin shows whether that momentum is worth having.
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Wafra Insights provides general information for educational purposes and should not be treated as accounting, tax, legal or other professional advice specific to your circumstances. Requirements may differ depending on your business and situation. Seek appropriate professional advice where required.