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Customer Profitability Analysis
Customer Profitability Analysis (in short CPA) is a management accounting and a credit underwriting method, allowing businesses and lenders to determine the profitability of each customer or segments of customers, by attributing profits and costs to each customer separately. CPA can be applied at the individual customer level (more time-consuming, but providing a better understanding of business situation) or at the level of customer aggregates / groups (e.g. grouped by number of transactions, revenues, average transaction size, time since starting business with the customer, distribution channels, etc.). CPA is a "retrospective" method, which means it analyses past events of different customers, in order to calculate customer profitability for each customer. Equally, research suggests that credit score does not necessarily impact the lenders' profitability. Reasons for introducing CPA Management accounting systems often focus on products, departments, or geographic regions, but n ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Whale Curve - Cumulative Customer Profitability
Whales are a widely distributed and diverse group of fully Aquatic animal, aquatic placental mammal, placental marine mammals. As an informal and Colloquialism, colloquial grouping, they correspond to large members of the infraorder Cetacea, i.e. all cetaceans apart from dolphins and porpoises. Dolphins and porpoises may be considered whales from a formal, Cladistics, cladistic perspective. Whales, dolphins and porpoises belong to the order Cetartiodactyla, which consists of even-toed ungulates. Their closest non-cetacean living relatives are the hippopotamuses, from which they and other cetaceans diverged about 54 million years ago. The two parvorders of whales, baleen whales (Mysticeti) and toothed whales (Odontoceti), are thought to have had their Most recent common ancestor, last common ancestor around 34 million years ago. Mysticetes include four Neontology, extant (living) Family (biology), families: Balaenopteridae (the rorquals), Balaenidae (right whales), Cetotheriid ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Robert S
The name Robert is an ancient Germanic given name, from Proto-Germanic "fame" and "bright" (''Hrōþiberhtaz''). Compare Old Dutch ''Robrecht'' and Old High German ''Hrodebert'' (a compound of '' Hruod'' () "fame, glory, honour, praise, renown, godlike" and ''berht'' "bright, light, shining"). It is the second most frequently used given name of ancient Germanic origin.Reaney & Wilson, 1997. ''Dictionary of English Surnames''. Oxford University Press. It is also in use as a surname. Another commonly used form of the name is Rupert. After becoming widely used in Continental Europe, the name entered England in its Old French form ''Robert'', where an Old English cognate form (''Hrēodbēorht'', ''Hrodberht'', ''Hrēodbēorð'', ''Hrœdbœrð'', ''Hrœdberð'', ''Hrōðberχtŕ'') had existed before the Norman Conquest. The feminine version is Roberta. The Italian, Portuguese, and Spanish form is Roberto. Robert is also a common name in many Germanic languages, including En ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Activity-based Costing
Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. Therefore, this model assigns more indirect costs ( overhead) into direct costs compared to conventional costing. The UK's Chartered Institute of Management Accountants (CIMA), defines ABC as an approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities, and activities to cost objects based on consumption estimates. The latter utilize cost drivers to attach activity costs to outputs. The Institute of Cost Accountants of India says, ABC systems calculate the costs of individual activities and assign costs to cost objects such as products and services on the basis of the activities undertaken to produce each product or services. It accurately identifies sources of profit and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Direct Costs
Direct costs, in accounting, are costs directly accountable to a cost object (such as a particular project, facility, function, or product). The equivalent nomenclature in economics is specific cost. Direct costs may be either fixed or variable, but typically comprise materials, labour, and specific expenses such as, e.g. a royalty payment to a patent holder for a given production process, all directly attributable to a cost object. Thus by industry: *In construction, the costs of materials, labor, equipment, etc., and all directly involved efforts or expenses for the cost object are direct costs. *In manufacturing or other non-construction industries, the portion of operating costs that is directly assignable to a specific product or process is a direct cost.''Standard AACE International Recommended Practice No. 10S-90 COST ENGINEERING TERMINOLOGY TCM Framework: General Reference'', Association for the Advancement of Cost Engineering International, 2010, Pg 35 *In project manag ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Indirect Costs
Indirect costs are costs that are not directly accountable to a cost object (such as a particular project, facility, function or product). Like direct costs, indirect costs may be either fixed or variable. Indirect costs include administration, personnel and security costs. These are those costs which are not directly related to production. Some indirect costs may be overhead, but other overhead costs can be directly attributed to a project and are direct costs. There are two types of indirect costs. One are the fixed indirect costs, which are unchanged for a particular project or company, like transportation of labor to the working site, building temporary roads, etc. The other are recurring indirect costs, which repeat for a particular company, like maintenance of records or the payment of salaries. Indirect vs direct costs Most cost estimates are broken down into direct costs and indirect costs. Direct costs are directly attributable to the object. In construction, th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Overhead (business)
In business, an overhead or overhead expense is an ongoing expense of operating a business. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor. Overheads cannot be immediately associated with the products or services being offered, and so do not directly generate profits. However, they are still vital to business operations as they provide critical support for the business to carry out profit making activities. One example would be the rent for a factory, which allows workers to manufacture products which can then be sold for a profit. Such expenses are incurred for output generally and not for particular work order; e.g., wages paid to watch and ward staff, heating and lighting expenses of factory, etc. Overheads are an important cost element, alongside direct materials and direct labor. Overheads are often related to accounting concepts such as fixed costs and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Accounting
Cost accounting is defined by the Institute of Management Accountants as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, allocating, aggregating and reporting such costs and comparing them with standard costs". Often considered a subset or quantitative tool of Management accounting, managerial accounting, its end goal is to advise the management on how to optimize business practices and processes based on cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future. Cost accounting information is also commonly used in financial accounting, but its primary function is for use by managers to facilitate their decision-making. Origins of cost accounting All types of businesses, whether manufacturing, trading or producing services, r ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Activity-based Costing
Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. Therefore, this model assigns more indirect costs ( overhead) into direct costs compared to conventional costing. The UK's Chartered Institute of Management Accountants (CIMA), defines ABC as an approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities, and activities to cost objects based on consumption estimates. The latter utilize cost drivers to attach activity costs to outputs. The Institute of Cost Accountants of India says, ABC systems calculate the costs of individual activities and assign costs to cost objects such as products and services on the basis of the activities undertaken to produce each product or services. It accurately identifies sources of profit and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Pool
Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization. The principle behind the pool is to correlate direct and indirect costs with a specified cost driver, so to find out the total sum of expenses related to the manufacture of a product. While the exact construction cost pools differs, most companies choose to form numerical based sequences that can then be allocated to the desired project. More frequently, a single cost pool will have up to ten digits in the sequence, with certain groups of those digits used to relate back to the project or something else. Cost pool accounts consists of ten digits. The first three digits of the cost pool categorize a particular branches, the next three assign the project itown, and the final four digits assign a specific sub-group of expenses of the project, such as clerical costs. Cost pools consists of overhead costs admin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Operating Income
In accounting and finance, earnings before interest and taxes (EBIT) is a measure of a firm's profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses. Operating income and operating profit are sometimes used as a synonym for EBIT when a firm does not have non-operating income and non-operating expenses. Formula *EBIT = (net income) + interest + taxes = EBITDA – (depreciation and amortization expenses) *operating income = ( gross income) – OPEX = EBIT – (non-operating profit) + (non-operating expenses) where *EBITDA = earnings before interest, taxes, depreciation, and amortization *OPEX = operating expense Overview A professional investor contemplating a change to the capital structure of a firm (e.g., through a leveraged buyout) first evaluates a firm's fundamental earnings potential (reflected by earnings before interest, taxes, depreciation and amortization (EBITDA) and EBIT), and then determines ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Revenue
In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some company, companies receive revenue from interest, royalties, or other fees. This definition is based on International Accounting Standard, IAS 18. "Revenue" may refer to income in general, or it may refer to the amount, in a monetary unit, earned during a period of time, as in "Last year, company X had revenue of $42 million". Profit (accounting), Profits or net income generally imply total revenue minus total expenses in a given period. In accountancy, accounting, revenue is a subsection of the equity section of the balance statement, since it increases equity. It is often referred to as the "top line" due to its position at the very top of the income statement. This is to be contrasted with the "bottom line" which denotes net income (gross reve ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
