Asset-light business
Also called: asset light, asset-light model
A business that needs little plant, equipment or inventory to grow, such as software, services or brand-led companies.
Asset-light businesses can earn very high returns on capital and convert most of their profit into free cash flow. Their main assets, people, code, brands and customer relationships, mostly do not appear on the balance sheet, and their risks include losing key people and low barriers to new competitors.
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- Asset-light businessesWhy do asset-light businesses earn such high returns, and what are their risks?
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