Question: 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?

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

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