Abstract:

The paper presents the method how to evaluate company development, whether it is based on intensive or extensive factors. We first analyze all possible relations between development of company output, its inputs and company efficiency. We further show how the relationships can be expressed in figures. Further we introduce the dynamic parameter of intensity and the dynamic parameter of extensity. The first one evaluates the share of change in intensive factors on a firm’s development, whereas the second one fulfils the same function for change in extensive factors. The parameters are able to describe all possible types of firm development. They can be easily calculated – as data for the counting is needed only data about company costs and revenues, which are, at least for the management of a company, easily accessible. The paper discusses which values should the parameters achieve in the case of optimal company development. The proposed method is applied to Apple Company, which is seen as one of the most innovative companies in the world. Our analysis, however, shows that the development of Apple is based predominately on extensive factors.