Revenue breakdown by source
By source/business is a way of analysing how a company generates its income from different activities. It can help investors and managers understand the company's performance, profitability, growth potential, and competitive position. Some of the benefits of this analysis are:
- It shows the sources of revenue: This can help evaluate how sustainable and diversified the company's revenue streams are. For example, a company that relies on one major customer or product may be more vulnerable to market changes than a company that has multiple revenue sources.
- It identifies growth opportunities: This can help identify which segments of the business are growing and which are declining. For example, a company that has a high growth rate in its online sales may have an opportunity to expand its market share and customer base.
- It evaluates profitability: This can help understand the profitability of each segment of the business. For example, a company that has a high margin in its service segment may have a competitive advantage over a company that has a low margin in its product segment.
- It compares companies: This can help compare the revenue breakdown of companies within the same industry. For example, a company that has a more diversified revenue base may have a lower risk profile and a higher valuation than a company that has a more concentrated revenue base.
- It forecasts future performance: This can help project the future revenue growth potential of the company. For example, a company that has a strong revenue growth in its emerging markets may have a higher growth potential than a company that has a stagnant revenue growth in its mature markets.