Category Archives for Finance

Understanding Company Valuations

All publicly listed companies have valuations, that is, a price for which you can purchase the entire company, including both tangible and intangible assets. These valuations are readily available on the Internet (Yahoo Finance has up to the minute valuations), and yet I’m often surprised how few people in senior positions within publicly listed organizations […]

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The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

The Kraljic Matrix helps us develop a purchasing strategy for the products and services our organization consumes. It aims to remove supply vulnerability as much as possible and maximize our potential buying power. The model was published in Harvard Business Review in 1983, although it was already in use at BASF at this time. The […]

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Activity Based Costing

Activity based costing helps us understand what it costs for an organization to make its products and services. It does this better than traditional cost accounting. In a nutshell, activity based costing works by turning indirect costs into direct costs. Traditional models of cost accounting work by allocating costs based on direct costs. Indirect costs are either […]

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Financial Terms for Managers (Part 2)

If you missed part 1 of this glossary of financial terms for general managers you can find it here. In this final part of the two part series we will cover item 21 onwards from the list below. Profit & Loss (P&L) Balance Sheet Income Statement Cash Flow Statement Contribution Margin Expense Allocation Return on […]

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