- Erosion usually refers to long-term downward trends in a company’s business; short-term losses are generally not considered erosion.
- Profit erosion can occur when profits are redirected elsewhere in the business or costs rise.
- Unexpected erosion of assets, for example due to technical innovation, can reduce the perceived value - or book value - of a business.
- Sales erosion occurs when there is a long-term decline in sales, perhaps due to new competition or price cuts.