Analysis Intermediate: Start Thinking Like an Analyst

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1.
Why are economic moats advantageous?
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They allow a company to generate profits and keep competitors at bay. Companies that reward investors over the long haul are those that have a durable competitive advantage.
2.
Which of these companies best exemplifies the use of the network effect?
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EBay. eBay is the quintessential example of a company with a strong network effect.
3.
What is an economic moat?
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A long-term competitive advantage that allows a company to earn oversized profits over time. A moat protects the business and does not let other businesses in.
4.
Which of the following questions will not likely help you analyze a business?
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None of the above. All of the above are good questions to ask in business analysis. There are hundreds more, of course. But these are a good start.
5.
Of the following four questions about business analysis, which one would you most likely need outside help answering?
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How well is the business positioned relative to its competitors? For this one, you would need to get information about several other businesses to help you answer it.