Special Considerations - Deepstash

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Special Considerations

A common mistake companies make in their business model is that they often underestimate the costs of funding the business until it becomes profitable.

Many analysts believe that companies that run on the best business models can run themselves.

  • One way analysts and investors evaluate the success of a business model is by looking at the company's gross profit - the total revenue minus the cost of goods sold.
  • Analysts also want to see cash flow or net income - the gross profit minus operating expenses.

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The Business Model

The Business Model

A business model refers to a company's plan for making a profit.

  • It identifies the product or service
  • The target market
  • Anticipated expenses

A busin...

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Understanding Business Models

  • The primary component of the business model is the value proposition. A value proposition is a description of the goods or services a company offers and why they are desirable to customers or clients.
  • A new enterprise's business model also covers p...

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Types of Business Models

There are many types of business models for every kind of business.

  • Traditional business models include direct sales, franchising, advertising-based, and brick-and-mortar stores.
  • Hybrid models include businesses that combine internet retail ...

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Criticism of Business Models

There are two critical factors in judging business models. When business models don't work, it is because

  1. the story doesn't make sense anymore, for example, the airline industry;
  2. the numbers don't add up to profits, that is ...

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CURATED FROM

CURATED BY

lucy_d

Investing and saving is not the same thing.

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Cracking the code of the Income Statement

It consists of three main categories:

  • Sales or revenue during a given time period. It includes sales (revenue) and Earnings-per-share (EPS)
  • Costs and expenses: “Above the line” are the cost of goods sold (COGS), cost of services (COS). “Below t...

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