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CVP analysis employs the same basic assumptions as in breakeven analysis. The assumptions underlying CVP analysis are: The behavior of both costs and revenues is linear throughout the relevant range of activity. (This assumption precludes the concept of volume discounts on either purchased materials or sales.)
Using like-for-like sales is a method of valuation that attempts to exclude any effects of expansion, acquisition, or other events that artificially enlarge the company's sales. For example, if you are trying to compare the turnover of company ABC from this year to last year, it makes sense to exclude from the equation any sales resulting from ...
Contribution margin analysis is a measure of operating leverage; it measures how growth in sales translates to growth in profits. The contribution margin is computed by using a contribution income statement, a management accounting version of the income statement that has been reformatted to group together a business's fixed and variable costs.
Multiples analysis is one of the oldest methods of analysis. It was well understood in the 1800s and widely used by U.S. courts during the 20th century, although it has recently declined as Discounted Cash Flow and more direct market-based methods have become more popular.
DuPont analysis (also known as the DuPont identity, DuPont equation, DuPont framework, DuPont model, DuPont method or DuPont system) is a tool used in financial analysis, where return on equity (ROE) is separated into its component parts.
In break-even analysis, margin of safety is the extent by which actual or projected sales exceed the break-even sales. [4] Margin of safety = (current output - breakeven output) Margin of safety% = (current output - breakeven output)/current output × 100. When dealing with budgets you would instead replace "Current output" with "Budgeted output."
Sales variance is the difference between actual sales and budgeted sales. [1] It is used to measure the performance of a sales function, ...
RFM is a method used for analyzing customer value and segmenting customers which is commonly used in database marketing and direct marketing. It has received particular attention in the retail and professional services industries. [1] RFM stands for the three dimensions: Recency – How recently did the customer purchase?