The Importance of Scale in a Business

You're paying over 10 times sales for a company that does not have particularly impressive gross margins. But again, that could be due to a lot of scale and stuff. That's why you can be in a business like this with the gross profits as low as they are. Returns on capital are not amazing at most of these companies. They're very good but that means that it depends mostly on growth if they'll have in the future.