Tag: decision making

SWOT Analysis

See Also: Porter’s 5 Forces of Competition Core Competencies How to Write an Action Plan How to Turnaround a Company SWOT Analysis The SWOT Analysis – an acronym standing for Strengths, Weaknesses, Opportunities, and Threats – assesses a company’s competition in the desired field or market. This analysis serves as an excellent tool for decision-making, either

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Sunk Costs

See Also: Sunk costs: How should they affect your future business decisions? Variable vs Fixed Cost Replacement Costs Joint Costs Service Department Costs Ten In-House Secrets for Reducing Your Company’s Legal Costs Capital Budgeting Methods Sunk Cost Definition What is sunk cost? A sunk cost is a cost that has been incurred and cannot be

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Segment Margin

See Also: Segment Margin Example Segmenting Customers for Profit Net Profit Margin Analysis Operating Profit Margin Ratio Margin vs Markup Profitability Index Method Segment Margin Definition Segment margin is a measure of profitability that applies to individual product lines. It is calculated as segment revenues minus variable costs minus avoidable fixed costs. It is also used to

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Securities Act of 1933

See Also: Primary Market Securities Exchange Act of 1934 Investment Banks Secondary Market Initial Public Offering (IPO) Securities Act of 1933 The Securities Act of 1933 was a landmark decision in the United States to regulate the issuance of newly issued shares into the market – an initial public offering. The act is also there

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Sensitivity Analysis Definition

See Also: Operating Profit Margin Ratio Analysis Free Cash Flow Analysis Cost Volume Profit Model General Ledger Reconciliation and Analysis How to Prepare a Break Even Analysis Sensitivity Analysis Definition Sensitivity analysis consists of studying the effects of changes in variables on the outcomes of a mathematical model. Furthermore, a model may consist of numerous

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Select Your Commercial Insurance Broker

See Also: How to Avoid Additional Insurance Premiums Rising Health Insurance Costs Evaluating and Renewing Employee Health Insurance Plan Risk Premium Service Department Costs Select Your Commercial Insurance Broker Often times, the CFO of a company has the responsibility for making the decisions regarding the commercial insurance coverages for their company. Normally, this is an

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Partnership

Partnership Definition A partnership is a type of business organization. Two or more individuals own and operate this business organization. These individuals are partners. Furthermore, it is unincorporated. Although it is not considered a legal entity separate from its owners, the details of this arrangement are stipulated in a contract. Call that contract a partnership

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Opportunity Cost Article

See Also: Opportunity Costs Capital Budgeting Methods Opportunity Costs In Your Decision Making Opportunity Cost Decision Making An opportunity cost is a hypothetical cost incurred by selecting one alternative over the next best available alternative. Opportunity costs are relevant in business decision making. In addition, companies commonly use them when evaluating corporate projects. Opportunity Cost

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Opportunity Cost Definition

See Also: The Future of the Accounting Workforce Future Value Cost Driver Certified Public Accountant (CPA) Auditor Opportunity Cost Definition Revenue that has been forfeited for an alternative use of time or facilities. Often times these types of decisions are made because a company or person forgoes an immediate cash stream for hopefully a larger

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Moral Hazard

See Also: Business Risk Commercial Risk Interest Rate Risk Investment Risk Risk Premium Moral Hazard Definition Moral hazard, defined are the circumstances or situations that increase the probability or riskiness of a loss. This is often due to a person’s habits or morals. Moral Hazard Explained Moral hazard risk is the risk that is associated

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NPV vs Payback Method

See Also: Payback Period Method Bailout Payback Method Rule of 72 NPV vs Payback Method NPV (Net Present Value) is calculated in terms of currency while Payback method refers to the period of time required for the return on an investment to repay the total initial investment. Payback, NPV and many other measurements form a

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Marginal Tax Rate

See Also: Tax Brackets Prepaid Income Tax Flat Tax Rates Deferred Income Tax Cash Flow After Tax Marginal Tax Rate The marginal tax rate is the tax rate that applies to an incremental dollar of a company’s pre-tax income. It is the tax rate paid on the last dollar earned. A company may incur a

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