Today I wish to talk about a peculiar linear motion of financial transactions. The theorem and relationships I will explain today will bring awe even in traditional or rigorous entrepreneurs and economic systems. It is simple but has a profound science behind it if we reflect. The theorem is this. More significant, the number of transactional volumes lower will be profitability at 10 to 15 or 16 to 20 years of a lifetime. This seems really peculiar or nicely presented fact. Let me differentiate my understanding of transactional volumes related to profitability if banks or financial institutes do not make profound differentiating factoring in urgent to emergent situations. Let me describe it. Transactional values are calculated through coefficients in the numerator to ratios in appeared volumetric differentiability. But do you know the coefficients used to calculate differential ability changes with time? Let say we calculate transactional volume through rigorous mathematics, and let say we have 20000 returns on the precluded values. Then each precluded value has ten different methods of segregating the differential categories.
Now each category reduces the volume by, say, the dwindling portion of 6 Indian Rupee. Since I am from India, I am taking an example of its digital transactions. The matriculate theorem’s transactional volume says each unit sold for 5 Rs will commission the bank at five paise. This means the transactional work is bringing the importance with a price to result in a numbered digit. Now the coefficients used to calculate transactional volume are matriculated by five percent profitability after all expenses. This results in negative values at the end of the 15 to 20 year period. Do you wonder how? Let me explain the theorem. The base value theorem says every profit gets carried with a digital transaction, but the intrinsic value of that profit reduces. How it is not through inflation as you might have already considered. The theorem says this.
The portion of digital anomaly that results in volume-based calculations is written with escalated factors of pertaining able and defunct charges. That means the transactional volumes give results that appear as portions of profitability, but the theorem says every transaction deteriorates its principle value through numeric numbers. Did you see my point? A numeric number is a digital portion that validates the category. Did you see my point? The class under which profitability is measured gets an account deficit value at a lifetime. Did you honor what I am saying? The volume composition is essential. So what I wish to bring is positioning digital transactions merely in the form of volume calculation without measuring, or main volume category leads to enormous pain in understanding profitability at 10 to 15 years. Did you see my point? Digital transactions are baseline profits. But if we calculate profits without categories marked in the preamble and judge the composite value to generate earnings as a regular habit of the transaction and start measuring banks or financial institute profitability with ordained coefficients will lead to loss at the end of an extended period. What is the solution? It is to categorize profitability based on multi coefficients and then understanding the trends in the long term gives sustainability and exemplified marked excellence.
Thank you.
Karnati Kiran
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