07 Feb Business Alchemy 101 Lesson 17–Deflated Sales Growth (Part One)
How much do you pay today for a gallon of milk? What about a year ago? The actual value of a dollar constantly changes and though there are other factors that go into the fluctuation of the prices of things, this is a major contributor.
When you are comparing your sales from one year to the sales of another year, the change of the value of a dollar will definitely have an impact on things.
Remember back in elementary school when you had to add 3/4 and 2/5 and you learned about finding a common denominator in order to find the answer? That is exactly what we do here with Deflated Sales Growth. We find a common denominator so that when we compare the revenue of the two years, we know independent of the market fluctuations how we are doing with our sales.