Business Quantification and Implementation

Flashcards about Business Quantification and Implementation

Business Implementations

The driving force behind all activities striving to accomplish one or more objectives in a business plan.

Strategic Plan

Essential for a business as it provides a clear direction to follow, ensuring the attainment of goals, providing value to customers, and, ultimately, achieving success.

Effective business implementation

A powerful tool for companies to gain a competitive advantage.

Forecasting

Involves using past and present data and patterns to make predictions or estimates about future events or trends.

Sales forecast

Estimate the number of goods and services a business believes it can sell over time.

Markup

Cost per unit x Desired Markup

Selling Price Formula

Cost Per Unit x Markup Price

Projected Daily Revenue Formula

Selling Price x Volume of Items Sold

Projected Items Sold Monthly Formula

Items Sold Daily x 30 Days

Projected Monthly Revenue Formula

Selling Price x Projected Items Sold Monthly

Projected Items Sold Annually Formula

Items Sold Monthly x 365 Days

Projected Annual Revenue Formula

Selling Price x Projected Items Sold Annually

Financial Ratio

Compares two numbers from a company's financial statements to show their relationship.

Profitability Ratio

A financial metric used to assess a company's profitability and ability to generate shareholder returns.

Return on Investments (ROI)

Also called return on equity (ROE). It compares income or profit after taxes to total stockholder's equity, specifically average stockholder's equity.

Return on Investment (ROI) Formula

Net Income / (Average Assets / 2)

Operating Income Ratio (OIR)

shows the percentage of profit a company can generate from each peso of its investment.

Operating Income Ratio Formula

(Operating Expenses + Cost of goods sold) / Net Sales

Return on Assets (ROA)

A measure of how well a company has used its assets.

Return on Assets Formula

Operating Income / Average Total Assets

Financial Health Ratio

A financial metric that determines the company’s capacity to pay its short-term and long-term obligations as they become due.

Stockholder’s Ratio Formula

Total Equity / Total Assets

Debt Ratio Formula

Total Liabilities / Total Assets

Debt-to-Equity Ratio

shows how much of a company's balance sheet is financed by suppliers, lenders, creditors, and obligors compared to what shareholders have invested.

Debt-to-Equity Ratio Formula

Total Liabilities / Total Shareholder’s Equity

Liquidity Ratio

Refers to the company’s ability to pay its short-term obligations or liabilities.

Quick Ratio Formula

Quick Assets / Current Liabilities

Current Ratio Formula

Current Assets / Current Liabilities

Value Chain Analysis (VCA)

A process that involves identifying the primary and support activities of a particular organization or industry and capitalizing on these activities to reduce costs or increase differentiation.

Inbound logistics

Raw materials handling and warehousing.

Operations in VCA

Machining, assembling, and testing.

Outbound logistics

Warehousing and distribution of finished products.

Marketing and sales

Advertising, promotion, and pricing channel relations.

Service in VCA

Installation, repair, and parts.

Firm infrastructure

General management, accounting, finance, and strategic planning.

Human resource management

Recruiting, training, and development.

Technology development

Research and development and product or process improvement.

Procurement

Purchasing raw materials, machines, and supplies.

People Strategy

The organization’s prioritized people plan that enables a business to be successful by attracting, developing, retaining, and inspiring the workforce.

Recruiting

Finding and attracting potential resources for filling up vacant positions in an organization.

Retaining

Holding on to people, provided that a company wants to keep them in the first place.

Resonating

Employees must embrace and internalize the company's goals to achieve these goals efficiently.

Reviewing

Measuring and evaluating their performance with the organizational goals in mind.

Rewarding

Compensating, giving incentives, and recognizing employees for their work, loyalty, and accomplishment, which can be monetary or non-monetary.

Retooling

Re-orienting employees to the new directions of the enterprise.

Recycling

Allows employees to change jobs or even careers.

Business Model Canvas (BMC)

Merely a plan that outlines a company's financial goals.

Customer Segment

The various groups of people or organizations that an enterprise aims to reach and serve.

Channels in BMC

Ways a company reaches out to specific customer groups.

Key Partners

Relationships a business has with other people or organizations that make the business model work.

Value Proposition

Customers choose a business over others because of its value proposition, which meets their needs or solves the customers' problems.