When you walk into a shopping mall, what do you see? I see sale signs everywhere! How could a company ever make money if its products or services are always on sale? 50% off, buy 1 get 1 free, 70%… It never ends. Have you wondered if it’s always on sale, is it ever on sale? Marketing
When we start working with a new client, one of the first conversations we have is about setting prices. A company’s pricing strategy (and whether they have articulated it) tells me a lot about the culture of the organization and how they make money. Here’s a video that discusses different pricing strategies as well as which
Throughput Definition Throughput is the number of units of output a company produces and sells over a period of time. Furthermore, only units sold count towards throughput. Do not count units produced but not sold during the time period as throughput. The goal of a profit-seeking organization is to maximize throughput while minimizing inventory and
See Also: Service Department Costs Responsibility Center Profit Center Cost Center Cost Driver Transfer Pricing Transfer prices are the prices used for transactions within a company. A transfer price is an internal price. When one division of a company sells a product to another division of the same company, the price charged is called a
See Also: Net 30 Credit Terms Net Sales Credit Sales Daily Sales Outstanding (DSO) Commercial Risk Terms of Sale Definition Terms of sale definition is the terms which a buyer and seller agree upon. They are as important in exporting as they are with domestic sales. Terms of sale serve the purpose of creating uniform expectations between
See Also: 5 Cs of Credit Credit Sales Standard Chart of Accounts Income Statement Free Cash Flow Trade Credit Definition The trade credit definition refers to postponing payment for goods or services received. Another trade credit definition is buying goods on credit, or extending credit to customers. It is also receiving goods now and paying for
See Also: Credit Sales Daily Sales Outstanding (DSO) How to compensate sales staff Economic Order Quantity (EOQ) Economic Income Sales Order Definition A sales order definition is an internal document which lists buyer and sales quantity for a given purchase. It is also a valuable document for operations. A sales order form generally indicates that no
See Also: Lessor vs Lessee Lease Agreements Capital Lease Agreement Operating Lease Working Capital Sale and Leaseback Definition The sale and leaseback definition is a transaction in which a company sells its property to another company and then leases that property. The company that sells the asset becomes the lessee, and the company that purchases
See Also: Homemade Leverage Valuation Methods Financial Ratios Operating Profit Margin Ratio Operating Cycle What Your Banker Wants You to Know Operating Leverage Definition Operating leverage is a measure of the combination of fixed costs and variable costs in a company’s cost structure. A company with high fixed costs and low variable costs has high
See Also: Make-or-Buy Business Decision Company Life Cycle Company Valuation Return on Equity Financial Ratios Joint Venture (JV) Accretion Mergers and Acquisitions Basics Mergers and acquisitions (M&A) refer to the buying, selling, and combining of companies. In an M&A deal, two companies become one. M&A deals are typically facilitated by investment bankers. Before going through
See Also: Dispersion Financial Instruments Basis Definition Basis Points Marking to Market (Financial Derivatives) Marking to market refers to the daily settling of gains and losses due to changes in the market value of the security. For financial derivative instruments, such as futures contracts, use marking to market. If the value of the security goes up
Getting Published in Today’s Environment Getting published in newspapers, magazines and books is an effective way to market your company. Unfortunately, with newspaper circulation declining and the use of syndicated columnists, it is difficult to publish your company in your local newspaper. If you can get two articles a year published, you are way ahead
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