Ratio

You're seeing it when two companies report the same revenue but one operates at a 40% margin and the other at 5%. The absolute number is identical; the ratio reveals entirely different businesses.

You're seeing it when a team doubles its headcount but output only increases by 20%. The input-to-output ratio degraded — the team is scaling linearly in cost but sub-linearly in value.

Track your three most important ratios — not just your headline numbers. CAC:LTV, revenue per employee, and burn multiple will tell you more about your company's health than revenue alone ever could.

Singleton ran Teledyne not on revenue growth but on return ratios. While peers chased top-line expansion, Singleton focused on return on equity, earnings per share, and free cash flow yield — ratios that exposed real value creation. He bought back 90% of Teledyne's shares when the price-to-earnings ratio was irrationally low and issued shares when the ratio was high. Every capital decision was governed by ratio analysis, not absolute size. Over 25 years, Teledyne's stock compounded at 20% annually. Founders should learn from Singleton: absolute numbers impress boards and journalists, but ratios reveal whether the business is actually getting stronger or just getting bigger.