Courses / Revenue Model

Revenue Model

21 Lessons | 5 Quizzes

Revenue model relates to how businesses generate revenue. Specifically, we’ll learn how companies recognize revenue, how to think about revenue drivers and how to forecast revenue into the future. Since cash trickles down from revenue, understanding how a company generates revenue has important implications not only on the quality of the business but also on the amount of cash it’ll be able to generate. We’re now entering the stage of our stock analysis where we solve for the stock’s intrinsic value.

Key Takeaways:

  • Revenue recognition
  • Revenue streams and drivers
  • How to forecast revenue

Lessons

1. Introduction to Financial Statements

4:28

The 3 main financial statements are the Income Statement, Balance Sheet, and the Cash Flow Statement.

2. What is Revenue Model

2:07

Revenue model is a representation of how businesses generate revenue.

3. Revenue Recognition

4:17

Revenue recognition sets forth the clear criteria that has to be met for a transaction to be recorded as revenue.

4. Accounts Receivable Model

5:24

Accounts receivable arises when a business had delivered its product or service but has yet to receive the payment.

5. Deferred Revenue Model

4:32

Deferred revenue arises when a business had received the payment upfront but has yet to deliver the product or service.

6. Revenue Streams

3:56

Revenue stream is a way to segment businesses' total revenue into individual sources, so investors can see where revenue is coming from.

7. Revenue Drivers

2:21

Revenue drivers are the variables that, when mathematically calculated, gives you the revenue amount.

8. Revenue Growth

5:08

As stock investors, we need to understand how revenue is changing year to year.

9. Declining Revenue Businesses

4:02

Declining revenue businesses are often indicative of fundamental challenges.

10. Revenue Model Case Study

9:39

Now that we have a conceptual understanding of the different revenue model components, it's time to turn to our case study.

11. Building Revenue Model in Excel

7:06

In this video, we'll learn how to build up a business's revenue model in Excel through its revenue streams and revenue drivers.

12. Average Selling Price (ASP)

3:03

Average Selling Price is the average price at which a company’s portfolio of products and services were sold during the reporting period.

13. Product Mix

7:42

Product mix is the relative contribution to a business’s overall sales volume by each product.

14. Introduction to Revenue Forecasts

6:03

In this video, we'll introduce the concept of revenue forecasts.

15. How to Forecast Revenue

6:58

In this video, we'll learn how to forecast revenue through a structured framework.

16. Forecasting Revenue Drivers

9:46

In this video, we'll walk through how to forecast the revenue drivers of our case study.

17. Case Switch

4:20

A case switch allows us to switch from one scenario of our stock analysis to another at the flip of a button!

18. Forecasting Revenue

3:05

In this video, we'll build the revenue forecast together for our investment case study.

19. Compound Annual Growth Rate (CAGR)

6:54

Compound Annual Growth Rate ("CAGR") is used to calculate an annualized growth rate over a multi-year period.

20. Bottom Up vs. Top-Down

2:47

In this video, we'll learn the difference between bottom-up vs. top-down analysis.

21. Connecting Dots

2:13

In this video, we'll connect the dots between what we learned here about revenue model with the big picture of stock investing.