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Consulting > Industry Revenue/Cost Breakdown > Flashcards

Industry Revenue/Cost Breakdown Flashcards

1
Q

Banking & Financial Services Revenue

A

Interest, premiums, fixed or variable fees (m&a fees, trading commissions, asset management fees)

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2
Q

Banking & Financial Services Cost

A 
IT (back end processing, apps, security, website)
Real estate costs
Losses on investments; loan defaults
Labor (customer service offshored)
Marketing
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3
Q

Banking & Financial Services Trends

A

Growth of mobile banking, regulations (dodd frank), larger market for retirement products

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4
Q

Retail Revenue

A

Conversion rate (visits vs purchase)
Basket size (driven by consumer spending)
Price/item
Sales per square foot

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5
Q

Total retail revenue =

A

Traffic * Conversion Rate * Basket Size * Avg Price/Item

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6
Q

Retail Costs

A 
COGS
Returns
Inventory management 
Distribution
Delivery
Labor 
Real estate
Online retail
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7
Q

Retail Trends

A

Seasonality; lots of sales end of year and holiday season
Social media presence; brand and mktg
E-commerce and tech reduces bargaining power of retailers (customers can easily compare price online)

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8
Q

Consumer Packaged Goods Revenue

A

Sales to customers vs sales to retailers (lower margin)
Shelf placement vs competition drives revenue
Packaging and price tiering
Product portfolio (cannibalization vs complementary products)

Key metric: price elasticity of demand; elastic demand if >/= 1 indicating very responsive to changes in price

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9
Q

Consumer Packaged Goods Costs

A 
COGS
Packaging
Manufacturing facilities
Distribution
Inventory Management
R+D
Environmental + regulatory
MKtg
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10
Q

Consumer Packaged Goods Trends

A

Discounts and price promotions lowered margins
Cannibalization issue when introducing new products
Try to have complementary products
Packaging and shelf placement

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11
Q

Technology Revenue

A 
Online Services (security, productivity, platforms)
-Ads
-Subscriptions
Hardware (computers, smartphones, servers)
-price * # goods sold
-after sales service
Software (search, storage)
-Licenses
-Managed services (SaaS)

Key metric: product obsolescence

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12
Q

Technology Costs

A 
R+D
Product development
IT+infrastructure
Labor
Hardware + component COGS
Software
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13
Q

Healthcare Providers Revenue

A

3rd party payers (insurance companies)
co-pays
inpatient+outpatient services without insurance
government reimbursement

Key metrics: bed capacity utilization, # deaths in surgery, # patients seen

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14
Q

Healthcare Providers Costs

A

Hospital facility + equipment (high upfront cost), physicians, insurance (malpractice liability), SG&A, medical suppliers, other labor

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15
Q

Healthcare Payers Revenue

A

Insurance premiums

Government subsidies

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16
Q

Healthcare Payers Costs

A

Payouts to healthcare providers (negotiation directly with healthcare providers on reimbursement rates)
Re-insurance
Labor

17
Q

Healthcare Payers Considerations

A

Bottom line increase due to pressure to eliminate/lower coverage caps, reduce denials based on pre-existing conditions etc

18
Q

Life Sciences (Pharma) Revenue

Key Metric

A

Drug sales
3rd party payer reimbursement
Government subsidies

Key Metric: price of drug * # of dosages
# of patented drugs
19
Q

Life Sciences (Pharma) Cost

A 
High R&D
Regulatory and legal costs
Manufacturing and production
Distribution and sales
Labor
20
Q

Life Sciences (Pharma) Considerations

A

Patents protect drugs for up to 20 years
FDA approvals last 5 years with high failure rate of drugs
High growth in emerging markets

21
Q

Airlines Revenue

Key Metric

A

Ticket fees
Extra baggage fees
In-flight purchases - Food and Beverage + Entertainment
Tiered amenities - legroom

Key Metric: Load factor (% aircraft capacity filled by paying passenger)

22
Q

Airline Cost

A 
Gate leases
Fuel
Airline leases
Insurance & legal fees
Maintenance/equipment
Crew & ground staff
In-flight consumables (Food and Beverage, Entertainment)
Marketing
Technology
23
Q

Airline Considerations

A

High fixed costs create major consolidation
Rise in 3rd party booking websites (expedia, booking.com)
Airlines use reward programs (miles) and partnerships with hotels, car rentals, and credit card companies to increase loyalty/differentiate

Cargo vs commercial flights
Leisure (price-sensitive) vs business class (price inelastic)

24
Q

Media and Entertainment Revenue

Key Metric

A

Advertising
Subscriptions
Licensing fees
One-time purchases

Key metric: viewership / readership

25
Q

Media and Entertainment Costs

A

Media production costs - studio, equipment, printing presses
Talent - actors, editors, writers
Other labor
Marketing
Technology - especially for digital media

26
Q

Media and Entertainment Considerations

A

High importance of network effects to increase viewership/readership
Online news/online streaming and digital content disruption
Consumer and advertising spend highly dependent on macroeconomic conditions

27
Q

Oil and Gas Revenue

Key metric

A

Upstream (drilling and extracting oil) - Raw oil price (largest % of revenue)
Midstream (transporting raw oil) - Transportation fees
Downstream (refining and selling finished petroleum products) - Sale of gasoline, oils, fuel

Key metric: Price of crude oil (affected by oil futures market)

28
Q

Oil and Gas Costs

A

Upstream - Exploration, drilling and extraction
Midstream - Crude oil, transportation and storage
Downstream - Crude oil, refinery PP&E (property, plant, and equipment)

29
Q

Oil and Gas Considerations

A

OPEC (Organization of Petroleum Exporting Countries) accounts for 45% of global oil production and 70% of worlds proven oil resources.

Effectively controls oil price

30
Q

Industrials Revenue

Key metric

A

Electrical equipment / components, heavy machinery, construction, aerospace and defense

Volume
Contract length
Bundling of product/service (maintenance package)
New technologies&products (automation)

Key Metric: Capacity utilization
Inventory Turnover
Book-to-bill ratio

31
Q

Industrials Cost

A 
Manufacturing - capital intensive
Labor (unions)
Distribution & inventory management
R+D
Marketing and trade shows
32
Q

Industrials Considerations

A

Highly tied to GDP growth, production and capacity utilization and other economic indicators

Greatly impacted by recession since drop in overall capital and construction spend decreases

Consulting (7 decks)

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