Sunday, December 9, 2012

Digital Media: Growing Emphasis on Returns

Now that the digital age is over a generation old, as global convergence and current sovereign debt/deficits based economic scenarios unfold, there will likely be a growing emphasis on definitive metrics of measuring tangible investment returns to shareholders. Today’s investors not only seek the conventional increasing top-line revenues, gross margins, and EBITDA margins, but, also higher net profit margins leading to dividends as well as retained earnings.

Especially in the last decade, we have seen emergence of the traditional business-revenue model(s) of a technology platform coupled with delivery of goods and services. Some of the well known incumbents are established players which are growing their balance sheets through mergers & acquisitions (M&A) while new entrants have gone public in the last 3-5 years.

Source: Pat V. Sonti, Mentor & Author
As the new age of technology takes shape based on advanced concepts, ideas, innovation and inventions, the traditional business-revenue model(s) may need to undergo a prioritization based on delivery of higher net profit margins, dividends and long-term capital appreciation. It is also important to ascertain the dynamic changes taking place with respect to commercial market fundamentals, business cycles and related fundamentals.

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