rocketpig on 05 August 2008
Yeah, assets vs. profitability can work for a company. A corporation with low profits and high assets, combined with low liability will be a steady earner for a long period of time barring market changes. These are the companies that people invest in for years at a time, often in mutual funds. They'll earn money slow and steady, perfect for a retirement fund.
Companies like Google, on the other hand, if they were to make a disastrous move, they could become virtually worthless within days because they have no assets to back up the company. It can be a double-edge sword. With no assets, the company is very nimble but very prone to crashing and burning should a dumb decision be made.
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