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Profitability Framework

The document provides a cheatsheet on profitability frameworks that discusses maximizing profit and return on invested capital by increasing revenue through pricing strategies and customer segmentation, decreasing variable and fixed costs, and minimizing invested capital including net working capital and fixed capital.

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dubstepo
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1K views2 pages

Profitability Framework

The document provides a cheatsheet on profitability frameworks that discusses maximizing profit and return on invested capital by increasing revenue through pricing strategies and customer segmentation, decreasing variable and fixed costs, and minimizing invested capital including net working capital and fixed capital.

Uploaded by

dubstepo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Profitability Framework Cheatsheet

Profit
(maximise)

Revenue

Price
Pricing Strategy
1. Competitor analysis
2. Cost based pricing
3. Value based pricing

Costs

Variable Costs

Qty

Increase Qty / Product Mix


Segment by customer base

Unit Cost

This cheatsheet will give you an edge in your consulting career, so dont share it with your friends.
Tom Spencer 2016

Decrease Costs
Draw out value chain to see all costs

Fixed Costs

Raw Materials
Shipping
Energy

Qty

SG&A
Rent / Interest
R&D, Depreciation
Labour (fixed contract)

Expanded Profitability Framework Cheatsheet

Return on
Invested Capital
(maximise)

Profit
(maximise)

Invested Capital
(minimise)

Net Assets

Net Working
Capital
NWC = Cash
+ Accounts Receivable
+ Inventory
Accounts Payable

This cheatsheet will give you an edge in your consulting career, so dont share it with your friends.
Tom Spencer 2016

Fixed Capital

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