Revenue Drivers For Different Industries

View homework help equity metrics drivers for different industries 1 from economia e 001 at luiss university of rome.

Revenue drivers for different industries. For all businesses revenue growth variable costs of revenue gross. Discount from bill discounting 3 bank guarantee commission 4. Based on my own experience and conversation with some of my friends in investment banking i am compiling below the key revenue drivers for some of the industries. Sometimes managers will develop a strategic plan and then figure out the related revenue and cost drivers.

The following are the revenue drivers i n bank 1. Within any one industry there can be many variable revenue models to consider. Remember that they are not sacrosanct and a different modeler analyst may come up with a different set of drivers. And he walks us through 9 23 the process of converting revenue growth into a proportional growth in cash flows.

For example quote levels is not a relevant revenue driver for an internet based firm offering beauty products but it is very pertinent for a roofing company that depends on client interest to drive its profits. Revenue and cost drivers are the individual elements that make up those gross numbers. It could be argued that revenue is the single most important aspect of your business. He explains 8 03 how different types of growth earn different returns on capital revealing that not all growth is equally value creating.

Many asset managers and analysts of all kinds spend most of their time modeling out revenue drivers which illustrates how important it is for management to understand them. Let s look at the travel industry as an example. Drivers impact all financial aspects of a business. And revenue drivers can get a lot more complicated than you think.

Revenues expenses and capital costs. They are different in each business model. Interest charged to loan 2. Start by looking at the company s financial statements and ask the question what drives this line item let s take revenue as an example.

Competing businesses may opt to use different drivers to enhance their sales strategies. In identifying what the main drivers are it s important to do a root cause type of analysis.