Profitability Ratios
I have never seen the payback method used in practice, having worked for trained financial professionals during my time working in government. I can, however, imagine some small businesses using this method. A good example I have seen in my travels might be a shopkeeper in the developing world. Such businesses usually do not have access to credit, so payback period is more relevant to their needs, as they must carefully manage their cash flow. For businesses that have access to credit facilities or equity financing, there is little need to manage cash flow so tightly that payback period would be the optimal method of making capital spending decisions.
Similarly, the internal rate of return method is seldom-used by serious financial professionals. This method focuses on the rate of return that the project generates. In some situations, there is an incentive to utilize this method in a company or unit…...
mlaWorks Cited:
Al-Raisi, A. & Al-Khouri, A. (2008). Public value and ROI in the government sector. Advances in Management. Vol. 3 (2) February 2010.
Green, T. & Brainard, M. (2005). Calculating the return on investment (ROI) for Organizational Development (OD) and Human Resources (HR) initiatives. Brainard Strategy. In possession of the author.
The focus specifically in the build-to-order strategy is in the quote-to-order workflow process that spans both direct and indirect channels of distribution as order capture points, followed by managing orders from a distributed standpoint, measuring the effectiveness of specific advertising and promotion programs on order rates and profits per order. The quote-to-order process also has significant implications for managing inventories and increasing inventory turns specifically. With an optimized inquiry-to-order process it is common to see a factor of 5 or more increase in inventory turns per year, a reduction of 30% or more in Days Sales Outstanding, and an increase in average order size by over 40-60% based on the use of more effective quoting and demand sensing and execution strategies throughout a company. The entire value chain for many companies is dependent on their ability to quickly sense and responds to customized product and service requests. At the…...
mlaReferences
Askegar and Columbus (2002) - Channel Management Best Practices: It's All About Orders. AMR Research Report. Monday September 9, 2002. Retrieved from the Internet on September 7, 2007:
http://lwcresearch.com/filesfordownloads/SqueezetheRevenueOutofSPRs.pdf
AMR Research (2003) - Configuration is the Heart of Customer Fulfillment for Complex Product Manufacturers. AMR Research Report. Monday March 31, 2003. Retreived from the Internet on September 3rd, 2007 at http://lwcresearch.com/filesfordownloads/ConfigurationIstheHeartofCustomerFulfillmentforComplexProductManufacturers.pdf
Columbus (2003) - Re-evaluate How Your Measure Your Channels' Performance. AMR Research. Boston, MA December 2, 2003 http://www.lwcresearch.com/filesfordownloads/ReevaluateHowYouMeasureYourChannelDec2003.pdf
All of these factors are taken into account in the development of the research findings and validation or refuting of the hypotheses that form the basis of the methodology in the model.
Major Points of Analysis
The authors' ambitious research agenda looks to define how companies can attain greater share of wallet through more effective profitable lifetime duration strategies. Implicit in this analysis is the need to invest in customer relationships to nurture, defend and retain them over time and create reward programs that accelerate customer loyalty as well (einartz, Kumar, 2003). The authors also point to the issues of cost reduction of marketing expenses, divestment strategies and customer outsourcing as all being indicators of a company generating low share-of-wallet and low profits per customer over time (einartz, Kumar, 2003). As a result of these insights the article and its research puts forth a significantly different view of lifetime customer value…...
mlaReferences
Bernoff, J., & Li, C.. (2008). Harnessing the Power of the Oh-So-Social Web. MIT Sloan Management Review, 49(3), 36-42.
Campbell, D., & Frei, F. (2010). Cost Structure, Customer Profitability, and Retention Implications of Self-Service Distribution Channels: Evidence from Customer Behavior in an Online Banking Channel. Management Science, 56(1), 4-24.
Reinartz, W.J., & Kumar, V. (2003, January). The impact of customer relationship characteristics on profitable lifetime duration, Journal of Marketing, 67(1), 77-99.
quality and profitability and dispels the myth that better quality costs more. Management of existing capital is a critical aspect of business financial management due to its direct role in acting profitability of businesses. When a business manages working capital, it denotes the management of existing assets as well as existing liabilities. esearchers in working capital management suggests interest must be paid on the impact of optimal or proper inventory management. While others propose, focus on management of accounts receivables. egardless of perspective, most agree that management of working capital has a major impact on a business's profitability.
The paper uses a simple survey asking several companies how they view quality and what aspects of quality measure do they apply to their own company. esults suggest that the companies adhere to these perceived measures and confirm quality leads to increased profitability. A study examined shows higher costs are not a…...
mlaReferences
Blair-Loy, M., Wharton, A., & Goodstein, J. (2011). Exploring the Relationship between Mission Statements and Work-Life Practices in Organizations. Organization Studies, 32(3), 427-450. Doi: 10.1177/0170840610397480
Cho, H., & Pucik, V. (2005). Relationship between innovativeness, quality, growth, profitability, and market value. Strat. Mgmt. J., 26(6), 555-575. doi:10.1002/smj.461
Gill, A., Biger, N., & Mathur, N. (2010). The Relationship between Working Capital Management and Profitability: Evidence from the United States. Business and Economics Journal, 2010(BEJ-10), 1-8.
Gross Profitability and Pharmaceutical &D Spending
Are the pharmaceutical companies - as they claim to be doing - re-investing their substantial profits into research and development for better, more patient-friendly and badly-needed medicines? Or, do the pharmaceutical firms just use that explanation to justify raking in huge profits at the expense of the already-financially-strapped consumer? Those are the questions asked - and answered, to a certain degree - in the Health Affairs Chevy Chase article, which this paper will focus on for a more full understanding of the issues presented. The article is written by F.M. Scherer, who is the Aetna Professor of Public Policy Emeritus at Harvard University's Kennedy School of Government; he is also a lecturer in the public affairs field at Princeton University.
The article claims that profit can indeed be "linked" to &D in three ways. One, by &D "leads, with long and variable lags, to new…...
mlaReferences
Becher, Elise C.; & Chassin, Mark R. "Improving the quality of health care: Who Will lead?" Health Affairs Chevy Chase 20 (2001): 164-179.
Mullins, Daniel C.; Wang, Junling; Palumbo, Francis B.; & Stuart, Bruce. "The impact
Of pipeline drugs on drug spending growth." Health Affairs Chevy Chase 20 (2001):
Scherer, F.M. "The link between gross profitability and pharmaceutical R&D spending."
This is highlighted by an incident reported on by Enviromine (2010) in July of this year. Here, "more than 160 people, including at least 100 children, have died from lead poisoning from artisanal gold mining in Nigeria's northwest Zamfara State. The scale of the disaster has been labelled unprecedented by the U.S. Centre for Disease Control and Prevention (CDC), which was called in by the Nigerian health authorities to help stem the epidemic." (Enviromine, p. 1)
Such incidences are demonstrably connected to a mining industry which uses the frequently lax environmental standards of the developing countries in which it operates in order to exploit local resources. This is often done to the detriment of these local communities. And given the low level of global regulation in this area, gold mining firms are often left to their own devices when shaping CSR policies. This points to the most important element of…...
mlaWorks Cited:
Arthur, J.L. (2009). Role of Public Participation in Achieving Development Agenda of Developing Countries: The Case of Communities Affected by Surface Mining of Gold in the Asutifi District of the Brong Ahafo Region of Ghana. African Journal of History and Culture, 1(4), 60-66.
Babut, M.; Sekyl, R.; Rambaud, a.; Potin-Gautier, M.; Tellier, S. Bannerman, W. & Beinhoff, C. (2003). Improving the environmental management of small-scale gold mining in Ghana: a case study of Dumasi. Journal of Cleaner Production, 11(2), 215-221.
Bebbington, a.J. & Bury, J.T. (2009). Institutional challenges for mining and sustainability in Peru. Proceedings of the National Academic of Sciences, 106(41), 17296-17301.
Concordia University Texas. (2009). Green Leadership Initiative. University Services.
(New York Times) MinitClinic understands the need and the importance of having a designated Primary Care Physician. Patients are educated on the benefits associated with a personal PCP and are encouraged to find one they are comfortable with. Information is given to each patient regarding area PCP's that are willing to accept new patients. Minitclinic is capable of transferring all records, prescriptions (if needed) and diagnostic tests to the designated PCP of their choice.
3. There are several issues that could possibly arise from the electronic transfer of patients records from clinic to Physician, such as its related law declaration, and the security of the patient's confidential information. The Journal of Medical systems reported "the usage of electronic anamneses involves in some concerned issues such as its related law declaration, and the security of the patient's confidential information. ecause of these concerns, a secure medical networking scheme is taking into…...
mlaBusk, P.(2011) International Journal of Integrated Care[2011, 11(Suppl)] Retrieved from website: PUBMED http://ukpmc.ac.uk/abstract/PMC/PMC3184799
Journal of Medical Systems[2011, 35(4):735-42] Journal Article, Research Support, Non-U.S. Gov't. Retrieved from website: http://ukpmc.ac.uk/abstract/MED/20703516
New York Times. (30 April 2012).Health Guide. Choosing a Primary Care Provider
Jones vs. Smith
Profitability Ratio's
Jones
Smith
Profit Margin
Return on assets
Return on equity
Liquidity Ratios
Current Ratio
Quick Ratio
If I were a credit manage I would approve a short-term trade credit to Smith before I would to Jones since their current and quick ratios are both higher. However, given the fact that all of the liquidity ratios were higher than one, I would probably offer them both a short-term line of credit.
If I were an investor however, I would be more attracted to Jones' operation since he not only receives a greater profit margin, but also makes better use of his assets and his equity. Although Jones seems to have more of an aggressive growth strategy which would most likely offer a greater return to the investor in the future.
Gourmet Foods Inc.
Gourmet Foods is currently experiencing a tremendous growth rate in its total sales volume. In 2011 it is apparent from their balance sheet that the…...
Fuel Hedging and Airline Profitability -- Literature eview
Airline operations are usually affected by several factors, especially the prices of oil and exchange rates since they have the capability of making things more complex. Fuel prices are some of the major risks that generate complexities in the operations of airlines and have considerable impacts on airline profitability. Consequently, airlines develop and adopt several measures for risk mitigation in order to enhance their profitability. Fuel hedging is one of the risk mitigation strategies adopted by airlines to help lessen operational risks and enhance profitability. The significance of fuel hedging as a risk mitigation strategy for airlines is evidenced in the volatility of fuel prices. As airlines constantly adopt this risk mitigation strategy, numerous studies have been carried out to examine its effectiveness. Existing literature examines the economic sense of fuel hedging with regards to the role and impact of this strategy in…...
mlaReferences
Allayannis, G. & Weston, J.P. (2001). The Use of Foreign Currency Derivatives and Firm Market Value. The Review of Financial Studies, 14(1), 243-276.
Carter, D.A., Rogers, D.A. & Simkins, B.J. (2006). Does Hedging Affect Firm Value? Evidence from the U.S. Airline Industry. Financial Management, 53-86.
Carter, D., Rogers, D. & Simkins, B. (2006). Fuel Hedging in the Airline Industry: The Case of Southwest Airlines. Social Science Research Network, 1-32.
Cobbs, R. & Wolf, A. (2004). Jet Fuel Hedging Strategies: Options Available for Airlines and a Survey of Industry Practices. Retrieved from Kellogg School of Management at Northwestern University website: https://www.kellogg.northwestern.edu/research/fimrc/papers/jet_fuel.pdf
S. Air Force. During the heyday of defense contracting in the 1950s and 1960s, it became apparent to the Defense Department that as projects get larger and more complex, it becomes increasingly difficult to track what is happening on them. This problem is compounded by the fact that these large projects are being carried out in multiple contractor organizations, each of which employs its own peculiar planning and control system (Frame, 2002).
y the early 1960s, it became increasingly apparent that the Defense Department was no longer able to track the efforts of its contractors with accuracy. It decided that contractors on large, complex projects should be required to report their project efforts in a consistent fashion. It worked to develop rules for reporting project progress and in 1967 issued Department of Defense Instruction (DODI) 7000.2, known also as the Cost/Schedule Control System Criteria (C/SCSC). In 1972, the Defense Department issued…...
mlaBibliography
Dennis, C., & Harris, L. (2002). Marketing the e-business. London: Routledge.
Dinsmore, P.C. & Cabanis-Brewin, J. (2006). The AMA handbook of project management. New York: AMACOM.
Fleming, Q., & Koppelman, J. (2000). Earned value project management, 2nd ed.
Pennsylvania: Project Management Institute.
From a supply chain standpoint, pricing departments must also create a high level of communication and collaboration across a business as well. Their role is to be the orchestrators of internal effort to manage suppliers to pricing and margin levels, ensuring consistency and focus on share goals. This is one of the primary reasons pricing has now become a strategic initiative within many businesses. For change to occur in how companies do their pricing strategies, it often takes a senior executive to manage the change in processes and systems to ensure pricing becomes strategy and shifts away from being tactical in focus (Marn, oegner, Zawada, 26).
From the sell-side or the distribution and selling channels standpoint, pricing has never been more critically important to a company's profitability. The continued consolidation of industries and commoditization of products making tracking pricing elasticity by product category critical, especially when they are sold through…...
mlaReferences
Manu Carricano, Jean-Francois Trinquecoste, and Juan-Antonio Mondejar. "The rise of the pricing function: origins and perspectives. " the Journal of Product and Brand Management 19.7 (2010): 468.
Thomas H. Davenport. "Make Better Decisions. " Harvard Business Review 1 Nov. 2009
Vrinda Kadiyali, Pradeep Chintagunta, and Naufel Vilcassim. "Manufacturer-retailer channel interactions and implications for channel power: An empirical investigation of pricing in a local market. " Marketing Science 19.2 (2000): 127.
Krishna, a., F. Feinberg, and Z. Zhang. "Should Price Increases Be Targeted?-Pricing Power and Selective vs. Across-the-Board Price Increases. " Management Science 53.9 (2007): 1407-1422.
revenue and decreasing costs and expenses for a business are two totally separate but interactive components. All entities that are in business; both for profit and non-profit, should be concerned with increasing the revenues as well as decreasing the expenses; it makes smart business sense and those entities that do not do so often find themselves becoming irrelevant or even worse, no longer viable. As an example, even the public hospitals in China show concern as evidenced in a recent paper. The research found that "ith market-oriented economic and health-care reform, public hospitals in China have received unprecedented pressures from governmental regulations, public opinions, and financial demands. To adapt the changing environment and keep pace of modernizing healthcare delivery system, public hospitals in China are expanding clinical services and improving delivery efficiency, while controlling costs" (Zhao, Yu, Liu, Ma, ang, Kong, Li, Ma, Cui, Xu, Yu, Bao, Guo, ang,…...
mlaWorks Cited
Hicken, A. & Stoll, H.; (2008) Electoral rules and the size of the prize: How political institutions shape presidential party systems, Journal of Politics, Vol. 70, Issue 4, pp. 1109 -- 1127
Petronas promises cuts and LNG spending; (2009) TCE: The Chemical Engineer, Issue 817/818, pg. 10
Pozin, I.; (2012) Need a revenue boost? Try this simple formula, accessed on September 14, 2014 at http://www.inc.com/ilya-pozin/how-to-increase-revenue-small-business.html
Zhao, L-P.; Yu, G-P.; Liu, H.; Ma, X-M.; Wang, J.; Kong, G-L.; Li, Y.; Ma, W.; Cui, Y.; Xu, B.; Yu, N.; Bao, X-Y.; Guo, Y.; Wang, F.; Zhang, J.; Li, Y.; Xie, X-Q.; Jiang, B.G.; Ke, Y.; (2013) Control costs, enhance quality, and increase revenue in three top general public hospitals in Beijing, China, PLoS ONE, Vol. 8, Issue 8, pp 1 -- 7
UNSEC
USEC Extension
USEC's pursuit of the ACP is driven largely by a need to increase the profitability of uranium enrichment; given the current market forces and the type of product being offered for sale, increasing profit margins by increasing the price of the product or by increasing market share/market size are simple not tenable options. Instead, cheaper and a more efficient way for enriching uranium into saleable product units is needed in order to make the industry and activity truly profitable, and this is what the ACP represents. The enrichment process using the ACP is radically different from the process currently in use by USEC, and will allow them to generate enormous savings while maintaining production levels to fit demand. This will make the company far more profitable than its few competitors in the industry, which will allow them to increase market share and dominance.
Key value drivers for the ACP include…...
Ratios
In order to estimate the profitability of companies, several measures have been worked out which can lead investors to right decisions. Liquidity analysis ratios include current ratio, quick ratio and net working capital ratio and they reflect the current or short-term situation within company finances. Profitability analysis ratios include return on assets, return on equity and return on common equity, profit margin and earnings per share and are more mid-term ratios reflecting pricing company strategy and ability to generate earnings. Asset turnover ratio, accounts receivable turnover ratio, inventory turnover ratio are measures of activity analysis for companies. Capital structure analysis ratios include debt to equity ratio and interest coverage ratio. There are also capital market measures. We shall incorporate some of each segment of financial performance measures to compare operations of two companies and draw our conclusions as for possible investment opportunities.
The story of one of the greatest multinational corporations,…...
Better Health Today, LLC321 Leadership Way, Suite SuccessBonus Salas, Oklahoma 74119(918) 555-8888M E M O A N D U MTo: Board of DirectorsFrom: Executive DirectorSubject: Addressing the Diversity Gap in Corporate Leadership at Better Health TodayThis memorandum is in response to your request for a review of the companys current lack of diversity and support for our community which have interfered with the ability to obtain major federal funding opportunities in recent years. Based on a critical analysis of the grant reviewers feedback, there are several steps the company can take now and in the future to overcome these constraints. In this regard, the memorandum first describes two key leadership competencies that are needed to improve Better Health Todays community relations followed by an examination of the impact that the lack of diversity has on the community meeting national public health initiatives. Finally, an analysis of two of the…...
mlaReferencesElliott-Engel, J., Westfall-Rudd, D., Seibel, M., Kaufman, E., & Radhakrishna, R. (2021). Extension Administrators’ Perspectives on Employee Competencies and Characteristics. Journal of Extension, 59(3), 1-9.Elsey, W. (2019, November/December). Nonprofit board fundraising made simple. Pulse, 14.Leadership competencies. (2022). Society for Human Resources Management. Retrieved from health and safety in community settings. (2022). U.S. Department of Health and Human Services. Retrieved from https://health.gov/healthypeople/objectives-and-data/browse-objectives/community .Warshaw, C. (2019). Local Elections and Representation in the United States. Annual Review of Political Science, 22(1), 461–479.https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/leadership-and-navigation/pages/leadershipcompetencies.aspx .Promote
Below is an example essay to help give you ideas when writing your own paper.
Title: Bridging the Skills Gap in the South African Supply Chain Industry
Introduction:
In today's rapidly evolving global economy, the supply chain industry plays a vital role in ensuring the efficient flow of goods and services. However, South Africa's supply chain sector faces a significant skills gap, hindering its growth and competitiveness. To address this challenge, it is essential to identify and cultivate generic, transferable, core, or key attributes that can bridge this gap effectively. This essay will discuss the different forms of such attributes....
As a behavioral health entrepreneur, it is crucial to utilize various methods of analysis to determine which strategies are the best for your business. These analysis methods can help you make informed decisions, understand your target audience, and drive effective outcomes. Here are some key methods to consider:
1. SWOT Analysis: Conduct a comprehensive assessment of your business's strengths, weaknesses, opportunities, and threats. This analysis will provide insights into your competitive advantage, internal challenges, market potential, and potential risks.
2. Market Research: Gather data and insights about your target audience, competitors, market trends, and customer preferences. This analysis will enable you to....
I. Introduction (200 words)
A. Background and Context: Provide a brief overview of the salon industry in Kidapawan City, highlighting its importance to the local economy and employment. Discuss the significance of customer relationship management skills in driving business performance in this competitive market.
B. Thesis Statement: Clearly state the central argument or hypothesis of the essay, which should focus on the positive correlation between customer relationship management skills and business performance in salons in Kidapawan City.
II. Literature Review (300 words)
A. Define and Discuss CRM Skills: Explain key concepts and theories related to customer relationship management skills, drawing upon relevant academic literature....
Microeconomic Analysis of HSBC Bank
Introduction
HSBC Bank is a global banking and financial services corporation headquartered in London, England. As one of the largest banks in the world, it operates in over 60 countries and territories, offering a wide range of financial products and services to individuals, businesses, and governments. This essay will focus on microeconomic concepts that can be applied to analyze HSBC Bank, with specific examples and insights.
Market Structure
One important microeconomic concept to consider is market structure. HSBC Bank operates in a highly competitive global banking industry. It faces competition from numerous other large banks, as well as smaller....
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now