Non-financial boards have been closed but will continue to be accessible in read-only form. If you're disappointed, we understand. Thank you for being an active participant in this community. We have more community features in development that we look forward to sharing soon.
I've been thinking (uh oh! LOL)....As most Fools know, we have a spreadsheet for Rule Makers, which allows us to rate the Rule Maker's year-over-year growth (or, *gasp*, lack thereof). In addition, it shows the most recent quarter's balance sheets of the Rule Maker's competition. Now, perhaps putting the late-stage Tweener in question through the traditional RM test [scoring for Brand, Financial Location, Financial Direction, and (a modified?) Monopoly Status] could be a smart start.However...The RM competitors' most recent balance sheets are merely a snapshot of time. In studying late-stage Tweeners, I think we would want to know how its legitimate competitors are doing year-over-year, as well. Obviously, figuring out the financial direction for 2 or more companies requires more effort than the traditional RM spreadsheet. But I think it would be necessary. Besides, I'm sure the extra bit of work would pay off in the end.Anyway, once these figures of financial direction are completed, perhaps we could add to the RM spreadsheet something called "Monopoly Momentum." That is, is the late-stage Tweener pulling away from its competition? Or, are the competitors' revenues, gross/net margins, improvement of flow ratio, etc. growing at the same (or better) rates. In this fifth section entitled "Monopoly Momentum," we could rate each margin, ratio, etc. Scoring could look SOMETHING like this:4 points - Late-stage Tweener's revenue (gross/net margins, improvement of flow ratio, et al.) growth is at least x percent more than its legitimate competitors' revenue growth.2 points - Late-stage Tweener's revenue (gross/net margins, improvement of flow ratio, et al.) growth is less than x percent more, but by at least y percent more than its legitimate competitors' revenue growth.0 points - Late-stage Tweener's revenue (gross/net margins, improvement of flow ratio, et al.) growth is equal to or slower than its legitimate competitors' revenue growth.Now that I've put this idea on the table, I have a couple questions: First, would this work? Or, is this idea totally bogus, since smaller companies (competition) tend to grow quicker. (Then again, are these smaller companies really legitimate competition??) If the Tweener was growing quicker, then no problem. But if the smaller competition is growing quicker, yet the Tweener is growing as well, couldn't we apply some sort of sliding scale? Any comments on any or all of the above?
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |