I need help coming up with an 5 to 10 academic examples. Please help me figure out a Fortune 500 company with:
the minimum number of product lines
a product/service that is easy to understand, value, and predict
My reasoning is that I want the focus to be on the financial modeling and not having a bunch of egos debating whether the model is built on appropriate assumptions. I’m not looking for something like Walt Disney, which generates revenue from parks, movies, toys, and clothes. I’m looking for something like Coca Cola or Exxon, which (I assume) only makes money from selling soda or gas.
^ Hard to predict materials prices, otherwise I’d agree. I’d go with a pipeline as the simpliest. Like Plains All American or Enbridge Energy Partners. If you understand how their business works, its pretty simple and straightforward. This is especially true if you’re building models for this project. The pipeline business is run on models, and they’re not overly complex.
Thank you all for your input. I’m weak on the energy industry. Where could I beef up on my industry knowledge so I don’t look like a total asshat? I guess the energy industry would fluctuate mostly based on market prices of oil/gas products, am I right?
The metals industry seems pretty-straight forward. I guess companies buy mines and hire miners to extract the silver/gold out? Where would the complexities be? Depreciating the value of the mines because they might run out of easily obtainable metals in varying timelines?
I guess it could have been any publicly traded company, now that you press. I figured a Fortune 500 would have tons of available information and coverage out there so I could compare my models to the pros’ models.
Uhh at best that’s a gross over symplification and at worst completely wrong. The “energy industry” has so many sub industries (refiners, independent E&Ps, integrateds, service companies, etc) that all react differently to the same inputs, different companies in the same sub-sector may respond differently to the exact same price change, etc. And good luck trying to model Exxon. The big guys like that are a publicly traded refiner, E&P company, and petrochemicals company all rolled up into one barely decipherable mess.
go with dollar stores, every item they sell is $1 and financials are easy to understand. Zillow would work as well or LNKD or any other social media company.