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Terms in this set (133)
1. Increase EPS
How do you increase your
2. Retire stock
stock price? (3)
3. Issue a dividend
How do you find EPS? Net Profit / # shares outstanding
The interest rate commercial banks charge their most
What is the prime rate?
credit worthy customers.
1. Inventory (balance sheet) / Avg. monthly sales
How do you find the
2. (Inventory / Sales) * 12
number of months of
inventory you have left?
3. (Unit Inventory / Unit Sales) * 12
(3)
[Average monthly sales = sales / 12 ]
What should be your ideal
inventory supply?
Around 3 months
1. R & D
What is included in SG&A 2. Promotion budget
expenses? (4) 3. Sales budget
4. Administrative expenses
,Under which strategy do Differentiators
firm's spend more on
SG&A expenses as a
percentage of sales?
How do you find the 1. Potential market share for specific product - total
amount of units a firm actual market share from
missed selling for a 2. Multiply the result by the total potential market
particular product? (2 share for all segments
steps)
How do you find the 1. Find the amount of units the product missed selling
amount a firm's EBIT would 2. Multiply the result by the product's price
have increased if they 3. Multiply the result of #2 by the product's CM
would not have stocked
out of a specific product?
(3 steps)
1. Fewer workers
An assembly line with
2. Lower labor costs
higher automation usually
3. Higher profits
has what? (4)
4. Longer R&D revisions
level of 1:
- 1 machine and 10 workers
What does is mean to
have an automation of 1?
level of 7:
What about 7?
- 7 machines and 4 workers
What does each level
Each additional unit = 10% decrease in labor costs
represent? (2)
Each additional unit = ($4 * capacity) COST OF
AUTOMATION
What are the aspects 1. Reliability
considered under a 2. Position (performance and size)
product's "product" 3. Age
factor? (3)
, What are the aspects Promotion budget
considered under a
product's "place" factor?
What are the aspects Sales budget
considered under a
product's "promotion"
factor?
Customer awareness deals Awareness: Promotion budget
with what?
What about customer Accessibility: Sales budget
accessibility?
For a product to be a 5
worthy competitor it must
have a survey score over
what?
How can you tell how No sales but have both capacity and automation
many different products
are emerging next year?
How do you find ROS? Profit / Sales
1. Profit margin
2. % of every sales dollar that is profit
What does ROS
3. Indicator of competition within an industry
represent? (5)
4. How hard we are working each dollar of sales
5. A pure income statement relationship
What kind of strategy
usually has a high ROS?
Strategy: differentiation with premium pricing
What makes up the 1. ROS
DuPont Chain? (5) 2. Asset turnover (above 1)
3. ROA
What should they typically 4. Leverage (1.8 - 2.8)
be? 5. ROE