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Toolbox

In:

Submitted By kyokia
Words 329
Pages 2
TOOLBOX:

1) Inventory Management - Inventory Turnover Ratio = Costs of Goods Sold/ Inventory

If inventory turns over 6 times, how many days does it stay on the shelves or in the warehouse?
These are annual figures: 365/7 = 60 days on the shelves.

Need a better specific Mission Statement.

2) Costs that do no change with volume of output are called

-Fixed Costs

Costs that change when volume changes are called

-Variable Costs

3) Fishbone Analysis

4) Low Urg/Low Impt – Low Urg/High Imp
High Urg/Low Impt – High Urg/High Imp

5) Present Value and Future Value

PV x C^n = FV
When comparing investments....pick the one that has a larger present value.

6) PORTER 5
Porter 5 does not cover the opportunities part of the SWOT ad Market Growth Potential.

7) HILO METHOD: Finds Slope (FC, VC)

[(Total Cost From Later Year - Total Cost from Year Before Later)] / [(Units from Later Year /-Units from Year Before Later)] = VC

FC = Total Cost – (VC)(UNITS)

2012 Units: 800 Total costs: 7000
2011 Units: 500 Total costs : 6100
[7000/6100] / [800/500] = $3/unit ( VC
3(800) 2400 ... 7000-2400
FC= 4600

8) BREAKEVEN POINT

BE = [FC/[P-VC]
BE ( Given a total profit ) = [FC+TP]/[P-VC]
QUESTION: How many units must you sell to earn $100 000 in profit
4600+ 100 000/ [5-3] = 104600/2 = 52 300

9) FINANCIAL STATEMENT

BALANCE SHEET - ASSETS = LIABILITIES + EQUITY
INCOME STATEMENT- NET INCOME = REVENUE MINUS EXPENSES
CASH FLOW STATEMENT

10) CONTRIBUTION MARGIN
Revenue minus variable costs

Fixed costs don't really affect the profitability of each line

They are not direct costs and dont need to be used when calculating which line is more profitable Total profitability of company = just add up the contribution margins of each line and subtract the fixed cost to find the annual profit

11)

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