Join Rudolph Rosenberg for an in-depth discussion in this video Identifying dependencies, part of Financial Analysis: Analyzing the Top Line with Excel.
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…Let's start with defining dependencies.…A dependency in a business context is something you rely on too much, and…that represents a risk for you company.…The two most typical dependencies a company faces are uncertain customers or…certain suppliers.…The concept I will be explaining here will be in the context of revenue analysis and…can be applied to any part of the company.…For example when a company starts it will sometimes have…one large customer that will provide a good portion of the revenue.…
In rare cases all of it.…The problem here is about what will happen to the company if that customer were lost.…The result would be a loss of most or all of the revenue and…potentially dire consequences.…The same goes with having only one supplier.…If that supplier goes down, or if he has any issue, you're directly impacted and…face the risk of not fulfilling all of your orders.…Another risk you face from depending too much on a single customer or…supplier, is the power it has over you and your company.…
You could be forced to make decisions you would not make otherwise.…
Also check out the companion course, Financial Analysis: Analyzing the Bottom Line with Excel.
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- Preparing your revenue information
- Comparing past performance
- Analyzing customer data
- Analyzing product information
- Identifying exceptional revenue