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capital).
• Key factors not in
financial statements: market pricing trends and point in business cycle.
Media
• Economies of scale are typically
important.
• Requires significant
investment.
• Convergence is
"blurring the line" between industries.
• Revenue recognition,
especially for subscriptions and advertising.
• Free cash flow, especially for cable and publishing.
• Pension plans as many companies are "old economy."
• Key factors not in financial
statements: regulatory environment and joint/ventures alliances.
Retail (for example, apparel or footwear)
• Intense competition against fickle
fashion trends.
• Inventory
management, which
is critical.
• Low margins.
• Revenue breakdown in
product lines and trends--one product can "make or break."
• Cash conversion cycle.
• Gross margin.
• Operating margin--
low employee turnover will keep this down.
Software
• High "up front" investment but high margins and high cash flow.
• Complicated selling schemes (channels, product bundling, license arrangements).
• Revenue recognition, which is absolutely essential in software industry.
• Gross margin trends.
• Stock option cost/dilution
because, of all industries, software
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