Unit Economics Memo

Create a concise, HTML-formatted unit economics memo for the business the user specifies — a public company by name or ticker, a private company with a deck or data room, an internal business unit, product line, program, or practice with management data — optionally scoped to a segment and optionally pointed at a specific source: an investor presentation, earnings release, annual report, pitch deck, board pack, or the current browser page.

This skill is designed for anyone who needs to understand how a business makes money before making a decision about it — an operator sizing up a competitor, a strategist evaluating a business line, a corporate development or partnerships lead looking at a target or partner, a founder pressure-testing their own model, a board member reading a portfolio company's deck, or an investor doing a first read. The goal is not to build a full financial model, a valuation, or a recommendation. The goal is to identify the best available unit of analysis, explain the business's economic engine, and clearly flag what the available data does not reveal.

Why this skill exists

"How does this business actually make money?" is the first question in almost every commercial decision, and it is usually answered with a vague paragraph rather than an economic engine. Companies disclose what flatters them and bury the unit that matters; pitch decks lead with total addressable market and skip the contribution margin; internal dashboards track thirty metrics and none of them is the unit. The discipline this memo enforces — pick the unit, build revenue from it, show the latest period against the prior year with sources, and say plainly what you cannot know — is what separates a business-model understanding from a business-model impression.

Inputs

Required:

• The business to analyze: a company name or ticker, or supplied materials (deck, data room extract, management accounts, annual report, board pack)

Optional but high-value:

• A segment, business line, product, or program to focus on
• Specific source URLs or files: investor presentation, earnings release, transcript, pitch deck, internal dashboard export
• The decision the memo informs (competitive analysis, partnership, acquisition, investment, budget allocation, program evaluation) — shapes which unit matters most
• The period to analyze, if not the latest reported

Missing-input behavior: A company name or ticker alone is enough for a public company. For a private company or internal unit with no supplied materials, ask once for the deck, data room extract, or management data; if the user has none, run on whatever public sources exist (website, press, filings, job postings) and label the memo's disclosure quality as limited. Do not switch the subject to a different, better-disclosed company without telling the user.

Available Sources

Use only sources you can actually see: public, web-accessible sources and materials the user supplies.

Public sources:

• Regulatory filings (annual and quarterly reports, prospectuses, current reports) where the business is listed or otherwise files
• Company investor relations pages
• Earnings releases and shareholder letters
• Earnings call transcripts
• Investor presentations
• Press releases
• Company websites, pricing pages, and product documentation
• Annual reports and audited financials for nonprofits and private companies that publish them
• Current browser page, if available through a Chrome extension or browsing context

Supplied materials:

• Pitch decks, proposals, business plans
• Data room extracts, management accounts, KPI dashboards, board packs
• Internal financial and operating data provided by the user

Do not assume access to proprietary datasets, paid terminals, private databases, or local files unless the user explicitly provides them. State in the memo which source basis was used: public filings, supplied materials, internal data, or a mix.

Core Standard

Do not fabricate missing unit metrics.

If the business does not disclose or supply a clean unit-level KPI, say so directly and use the highest-confidence available proxy. If no useful proxy exists, shorten the relevant section instead of padding the memo.

Every numerical claim and every business-specific model claim must be sourced. If a claim is an inference, label it clearly as an inference. Supplied materials are sourced by document name and page or slide; internal data is sourced by report name and date. Materials prepared by the business itself (pitch decks, management presentations) are written to persuade — cite them, but note where a figure comes from the business's own unaudited presentation rather than an audited or regulatory source.

Default Time Period

Use the latest reported period and the same period from the prior year.

Example:

• Latest period: Q3 FY2026
• Prior-year comparison: Q3 FY2025

If the business reports semiannually or annually, or if supplied data covers a different cadence (monthly management accounts, a trailing-twelve-month view), adapt to the latest available comparable period and explain the limitation. If only a single period is available, say so and drop the comparison column rather than inventing a prior period.

Step 1: Identify the Business and Relevant Sources

Determine:

• Business name
• Ticker and exchange, if public
• Ownership type, if not public (private, subsidiary, nonprofit, internal unit)
• Latest reported period
• Fiscal year convention
• Whether the user specified a segment, product, or program
• Source basis: public filings / supplied materials / internal data / mixed

Prioritize sources in this order for a public company:

1. Latest quarterly earnings release or shareholder letter
2. Latest quarterly filing
3. Prior-year comparable quarterly filing
4. Latest annual filing
5. Latest investor presentation
6. Earnings transcript, if useful for management commentary

For a private company or internal unit, prioritize:

1. Audited or reviewed financials, if any
2. Management accounts or KPI dashboards
3. The pitch deck, proposal, or board pack (persuasive — label accordingly)
4. Website, pricing page, and public statements
5. Press and third-party coverage

Capture source URLs, document names, and page or slide references for citation in the HTML memo.

Step 2: Classify the Business Archetype

Identify the business's primary model. Use the simplest useful archetype. If the business is multi-segment, focus on the largest or most analytically relevant segment unless the user specified one.

Use these archetypes as guides, not rigid categories:

Some archetypes need their own vocabulary. An asset manager is fee-earning assets × fee rate, a lender is earning assets × spread, an insurer is premiums against losses and expenses, a nonprofit is funding against cost per outcome. Do not force a SaaS-style or marketplace-style framework onto a business that does not work that way — and do not force a public-company framework onto a two-person agency whose unit is the retainer.

Step 3: Define the Unit

Write a clear unit definition:

• What is the "unit"?
• Why is this the best available unit?
• Is the unit directly disclosed or inferred?
• What revenue formula best approximates the business?

Examples:

• SaaS: customers × revenue per customer
• Marketplace: GMV × take rate
• Restaurant: stores × average unit volume
• Agency: retained clients × average retainer
• Clinic: visits × net revenue per visit
• Asset manager: fee-earning AUM × management fee rate
• Nonprofit program: beneficiaries served × cost per beneficiary, against funding raised
• Diversified company: segment revenue × segment margin

If no clean unit exists, state:

The business does not disclose a clean unit-level KPI. This memo uses [proxy] as the highest-confidence available proxy because [reason].

Step 4: Gather the Latest Period and Prior-Year Comparison

Create a compact table comparing the latest period to the same period in the prior year.

Include only metrics that are actually disclosed, supplied, or can be calculated from disclosed figures.

Preferred metrics:

• Revenue (or funding, for a nonprofit)
• Gross profit or gross margin
• Operating income or operating margin (or surplus/deficit)
• Segment revenue, if relevant
• Key operating unit metric
• Revenue per unit or implied rate, if defensible
• Archetype-specific metrics where applicable: AUM and fee rate, utilization and realized rate, occupancy and revenue per visit, cost per beneficiary

For every calculated metric:

• Label it as calculated
• Show the formula in plain English
• Use only sourced inputs

Do not estimate customer acquisition cost, lifetime value, churn, take rate, revenue per user, unit margin, or contribution margin unless the business discloses or supplies enough information to support the calculation. When a pitch deck asserts one of these without showing the inputs, report it as "management-stated, inputs not shown."

Step 5: Explain the Business Model

Write this section for a smart operator, strategist, or analyst who is trying to quickly understand the business.

Cover:

• What the business sells (or delivers)
• Who pays — and, where different, who uses it and who decides
• How pricing works, if disclosed
• What drives revenue growth: volume, price, mix, retention, utilization, capacity, funding, or transaction activity
• What drives margin: scale, gross margin, mix, fixed-cost absorption, labor and compensation, content or input costs, distribution, credit, or other relevant costs

Avoid generic language. Tie each point to the business's actual disclosures or supplied data.

Step 6: Explain the Unit Economics

Use the best available data to answer:

• What is the best unit of analysis?
• Is revenue growth being driven more by volume, price/rate, mix, or scale?
• Are margins improving, stable, or deteriorating?
• What does the latest period suggest about the economic engine?
• What cannot be known from the available data?

Stay neutral. Do not say "buy," "sell," "invest," "acquire," "partner," "cheap," "expensive," "attractive," or "unattractive" unless the user explicitly asks for a view.

Use language like:

• "The disclosed data suggests…"
• "The best available proxy is…"
• "The business does not disclose enough information to determine…"
• "Management states X; the supporting inputs are not shown…"
• "The key analytical question is…"
• "The main driver to monitor is…"

Step 7: Produce a Two-Page HTML Memo

Generate a standalone HTML document.

Requirements:

• HTML only
• Inline CSS
• Print-friendly
• No charts
• No external images
• No JavaScript
• Tables are allowed
• Keep the memo approximately two printed pages
• Include source links or document references as footnotes or inline links
• Use clear analyst-style headings
• Use concise prose
• Avoid generic filler

If the environment allows file creation, save the memo as:

reports/{SLUG}_unit_economics.html

where {SLUG} is the ticker for a public company or a short lowercase name for any other business.

If file creation is not available, return the full HTML in the response.

Required HTML Structure

Use this structure:

<!DOCTYPE html>
<html lang="en">
<head>
  <meta charset="UTF-8">
  <title>{Business Name}{ (Ticker) if public} — Unit Economics Memo</title>
  <style>
    body {
      font-family: Arial, Helvetica, sans-serif;
      color: #111;
      line-height: 1.45;
      max-width: 900px;
      margin: 40px auto;
      padding: 0 32px;
      background: #fff;
    }
    h1 {
      font-size: 26px;
      margin-bottom: 4px;
    }
    h2 {
      font-size: 18px;
      margin-top: 28px;
      border-bottom: 1px solid #ddd;
      padding-bottom: 4px;
    }
    h3 {
      font-size: 15px;
      margin-top: 18px;
    }
    .meta {
      color: #555;
      font-size: 13px;
      margin-bottom: 24px;
    }
    .summary-box {
      border: 1px solid #ddd;
      background: #fafafa;
      padding: 14px 16px;
      margin: 18px 0;
    }
    table {
      width: 100%;
      border-collapse: collapse;
      margin: 14px 0 20px;
      font-size: 13px;
    }
    th, td {
      border: 1px solid #ddd;
      padding: 8px;
      text-align: left;
      vertical-align: top;
    }
    th {
      background: #f3f3f3;
    }
    .note {
      color: #555;
      font-size: 13px;
    }
    .sources {
      font-size: 12px;
      color: #444;
    }
    @media print {
      body {
        margin: 20px auto;
        padding: 0 24px;
      }
      h2 {
        page-break-after: avoid;
      }
      table {
        page-break-inside: avoid;
      }
    }
  </style>
</head>
<body>

<h1>{Business Name}{ (Ticker) if public} — Unit Economics Memo</h1>
<div class="meta">
  Generated: {date} | Period analyzed: {latest period} vs. {prior-year period} | Source basis: {public filings / supplied materials / internal data / mixed}
</div>

<div class="summary-box">
  <strong>Executive summary:</strong>
  {3-5 sentences. Explain what the business does, the best available unit of analysis, the key data limitation and the most important neutral takeaway.}
</div>

<h2>1. Business Model</h2>
<p>{Explain what the business sells, who pays, how revenue is generated and what drives the model.}</p>

<h2>2. Unit Definition</h2>
<table>
  <tr>
    <th>Item</th>
    <th>Assessment</th>
  </tr>
  <tr>
    <td>Business archetype</td>
    <td>{Archetype}</td>
  </tr>
  <tr>
    <td>Best available unit</td>
    <td>{Unit or proxy}</td>
  </tr>
  <tr>
    <td>Revenue build</td>
    <td>{Formula-style explanation, e.g. retained clients × average retainer}</td>
  </tr>
  <tr>
    <td>Disclosure quality</td>
    <td>{Strong / moderate / limited, with explanation and whether figures are audited, regulatory, or management-stated}</td>
  </tr>
</table>

<h2>3. Latest Period vs. Prior Year</h2>
<table>
  <tr>
    <th>Metric</th>
    <th>{Latest period}</th>
    <th>{Prior-year period}</th>
    <th>Change</th>
    <th>Why it matters</th>
  </tr>
  {Rows for disclosed, supplied, and defensibly calculated metrics only}
</table>

<p class="note">
  Calculated metrics are labeled and use only sourced inputs. Management-stated figures without shown inputs are labeled. Missing metrics are not estimated.
</p>

<h2>4. Unit Economics Interpretation</h2>
<p>{Explain what the available unit metrics suggest. Discuss volume, price/rate, mix, utilization, margin, or capacity dynamics as relevant. Stay neutral.}</p>

<h2>5. What the Available Data Does Not Tell You</h2>
<ul>
  <li>{Missing KPI or analytical limitation}</li>
  <li>{Missing KPI or analytical limitation}</li>
  <li>{Missing KPI or analytical limitation}</li>
</ul>

<h2>6. Takeaways</h2>
<ul>
  <li>{Neutral takeaway about the business model}</li>
  <li>{Neutral takeaway about what changed year over year}</li>
  <li>{Neutral takeaway about what to monitor next}</li>
</ul>

<h2>Sources</h2>
<ol class="sources">
  <li><a href="{source_url}">{Source title}</a> or {Document name, page/slide, date}</li>
  <li><a href="{source_url}">{Source title}</a> or {Document name, page/slide, date}</li>
  <li><a href="{source_url}">{Source title}</a> or {Document name, page/slide, date}</li>
</ol>

</body>
</html>

Analytical Standards

Follow these standards:

1. Use only sources you can see — public sources and materials the user supplied.
2. Source every numerical claim.
3. Source every business-specific model claim.
4. Label all calculated metrics.
5. Label management-stated figures whose inputs are not shown.
6. Do not fabricate missing KPIs.
7. Do not pad with generic filler.
8. Prefer plain English over jargon.
9. Keep the memo neutral.
10. Keep the memo to approximately two printed pages.
11. Produce HTML as the final deliverable.

Example prompts

"How does Costco actually make money? Build me the unit economics memo — I want the membership-vs-merchandise split and what the latest quarter says about it."

"Here's the Series A deck for a dental-clinic roll-up we're considering partnering with. What's the right unit, does their per-clinic math hold up on the numbers they actually show, and what are they not showing?"

"Attached is the last four quarters of management accounts for our services division. Build the unit economics memo on a per-consultant basis and tell me whether the margin story is utilization or rate."

"Our foundation is evaluating a literacy nonprofit's annual report. Build the memo on a cost-per-student-served basis and flag what the report doesn't disclose."

Final Response to User

After creating the memo, briefly tell the user:

• Which business was analyzed and on what source basis
• Which latest period was used
• What the best available unit was
• Where the HTML file was saved, if applicable
• Any major data limitation

Do not include a recommendation — investment, acquisition, partnership, or otherwise — unless explicitly requested.

Works well with

Run company-first-pass or private-company-tear-sheet first when you need the broad picture before the economic engine. Use proposal-first-pass on the pitch deck itself when the question is the deck's overall credibility rather than the model. Use red-team-premortem when the memo surfaces a unit-economics assumption the whole plan depends on.