The interest coverage ratio is a quantity that is used to evaluate the financial health of a company. It is calculated by dividing the earnings of a company (before interest and taxes) by the amount of interest the company is required to pay over a fixed time period. It can be calculated using the formula, text{Interest Coverage Ratio}= frac{text{Earnings before interest and taxes(EBIT)}}{text{Amount of interest to be paid by the company}} We can calculate the EBIT of a company by subtracting the expenditure of the company from the total revenue. The interest coverage ratio is also known as the Times Interest Earned ratio...

Let's suppose that an airline has been incurring recurring losses and wants to shut shop to avoid further losses. However, the airline owes a considerable amount of debt to its investors, using whose money the airline purchased airplanes in the first place.  Scraping the airplanes would not give enough return on their original value. Another airline looking to amp up its fleet numbers would be ideal to buy the planes. But finding such a buyer when the struggling airline is looking to exit the business would be an uphill task. If the airline doesn't find a buyer, it would have...

Let's suppose someone wants to start a lemonade stand. Getting one up and running would be relatively easy and within the financial reach of the majority of the population. In this case, one could say that the barriers to entry to starting a lemonade stand business are low. On the other hand, if you wanted to start a new airline, getting one up and running would be relatively more difficult than starting a lemonade stand and outside the financial reach of the majority of the population. And say even if you had the financial resources needed to create an airline,...

In 2014, Brad stone published 'The Everything Store: Jeff Bezos and the Age of Amazon,' chronicling Amazon's journey from its inception until the year of publishing. In 2021, Brad Stone released another book, Amazon Unbound: Jeff Bezos and the Invention of a Global Empire, chronicling Amazon's growth from 2014 to 2021. Both books are essential reading for those who want to make sense of Amazon's all-encompassing and, at times, perplexing business. I read 'The Everything Store,' Stone's first book on Amazon, and made a book summary in Dec 2020. So, when Stone released 'Amazon Unbound' in May 2021, I decided to read...

Until the first decade of the 21st century, the traditional model of raising money to start a business included either borrowing money from a bank in exchange for collateral or convincing venture capitalists your idea was worthy of investment in exchange for equity. Even though these models had their own set of pros and cons, both rested on the assumption that the business will most likely succeed, moving customer validation, if not entirely, then for the most part, to a post-launch date. However, Indiegogo's entrepreneurial crowdfunding model flips the traditional fundraising model on its head. Under the Indiegogo Model, aspiring...

The proliferation of encyclopedic information can be classified into two eras: pre-internet and post-internet. Both eras gave birth to different models to create a knowledge repository and share it with a wider audience.   The earliest encyclopedic work to have survived until modern times dates back to the 1st century AD. Still, it was only after the advent of the printing press in the 15th century that encyclopedic knowledge was democratized. Most pre-internet encyclopedias, including Britannica, the earliest and the most famous Encyclopedia in the English-speaking world, had a similar operation style and business model.  As you can guess, they ran like more or less a...

Before I briefly explain the note-taking process, I want to introduce Gary Provost, the author of ‘100 ways to improve your writing.'  "Being a writer is not my profession. It is my nature," once said Gary.  His voluminous lifelong work is proof that the statement was not an exaggeration. Gary sold 22 (fiction and nonfiction) books to major publishing houses throughout his career, writing in almost every genre that the mind can conjure: How-To texts for writers, True Crime, Satire, Mystery, Romance, and more. Apart from writing books, Gary was also engaged in teaching writing, constantly honing his craft by helping...

In 2016, 13 years after being in existence, Tesla made a one-word switch in its mission statement.  The old mission statement read, "Tesla's mission is to accelerate the world's transition to sustainable transport." The updated mission statement became, "Tesla's mission is to accelerate the world's transition to sustainable energy."  I highlight this change because it opens up a different window to peek into the house of Tesla. The general perception built around Tesla is that it is a car company focused on speeding up our transition to electric or sustainable transport, but the mission statement change and newer product lines indicate that...

I'm going to throw you a challenge. Assume you have to start a university that would become the richest and the most prestigious educational institutions in humankind's history.  What plan of action would you create? What business model would you choose? How would you make it financially viable for the centuries ahead? A predictable approach would be to build a sustainable brand by providing top-notch education, establishing artificial scarcity by making applicants go through a challenging selection process, and ensuring students get placed in high-income jobs. In exchange for all of this, students would be willing to pay exorbitant fees.  But that's...

Originally a designer focussed on consulting, Paul Jarvis has written five books (including 'Company of One'), sold digital courses, and co-founded Fathom Analytics, a privacy-focused Google Analytics Alternative. His contrarian philosophy of purposefully staying small and questioning the conventional wisdom of building a big business empire has shaped Paul's long, successful, and personally meaningful career. In 'Company of One,' Paul shares the ideas behind his choosing this alternate path in business, and more broadly, in life -- a mindful approach based on designing work around life, not the other way around. Note: 'Company of One' contains 13 chapters but the book...