A startup has negative operating earnings, and thus a negative operating margin in the current year. How

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A startup has negative operating earnings, and thus a negative operating margin in the current year. How to forecast its operating margins in the future?

options

1:Start with the current margin and let it grow at a certain rate.

2:Start with a positive margin of a mature firm at a future time point and work backwards year over year till the current negative margin.

3:No need to forecast future margins because the firm will not survive in 1 year.

4:Cannot forecast future margins at all

Related Book For answer-question

Accounting for Decision Making and Control

ISBN: 978-1259564550

9th edition

Authors: Jerold Zimmerman

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Posted Date: Feb 06, 2024 02:40 AM

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A startup has negative operating earnings, and thus a negative operating margin in the current year. How

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The detailed answer for the above question is provided below While all the options have merits none of them fully capture the nuances of forecasting o... View the full answer

Accounting for Decision Making and Control

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