Definitions:
Average:
In colloquial language, an average is the sum of a list of numbers divided by the number of numbers in the list.
This will help to understand revenue as being averaged per branch.
If revenue for the first 15 branches in 2013 is x1 and the revenue from the first 15 branches in 2014 is x2, and the revenue from the newest 15 branches in 2014 is x3, then for there not to have been a decrease in revenue for the first 15 branches the following must be true:
x1 <= (x2+x3)
Since this is not true, one of two scenarios must have been true.
Scenario 1: 15 new branches produced some revenue:
If he bought or built 15 new branches, they must have produced something. Something that is non-zero. If the new branches had non-zero revenue, that means that the branches that produced revenue before the acquisition of the new locations must have revenue that dropped off sharply from the year before. If not, there would have to be an increase in revenue due to the new branches producing new revenue and the old branches not experiencing a decrease in revenue.
Scenario 2: 15 new branches produced nothing for six months:
If scenario 1 is not the case, and the "original" 15 branches are responsible for the total revenue for 2014, then that means that there were at least 15 branches that did zero business for at least six months. Some of these locations were already established staffing agencies replete with customer lists and industry contacts.
This is why the revenues are said to have decreased hugely when they are AVERAGED PER BRANCH. Which is, in fact, a fair judgement of performance since some, not all, of these branches had ample time to start producing SOMETHING.
Either way you choose to look at it, it is a purely dismal performance by management to add to the long list of missteps taken by this company's management.
