Identifying and Analyzing the Core Drivers of a Company's Performance
The core drivers of a company's performance are the key factors that determine its success or failure. By understanding these drivers, you can get a better sense of the company's long-term prospects.
How to Identify the Core Drivers
- Read the company's annual report: The annual report will often identify the key drivers of the company's performance.
- Read analyst reports: Analyst reports will often provide a detailed analysis of the company's core drivers.
- Talk to management: Management is in the best position to know what drives the company's performance.
How to Analyze the Core Drivers
- Assess the sustainability of the drivers: Are the drivers sustainable over the long term? Or are they likely to be temporary?
- Assess the impact of the drivers: How much of an impact do the drivers have on the company's performance?
- Assess the risks to the drivers: What are the biggest risks to the drivers?