Y A+bx B Yh Yl XH XL y X: Cost-Volume-Profit (CVP) Analysis
Y A+bx B Yh Yl XH XL y X: Cost-Volume-Profit (CVP) Analysis
Y A+bx B Yh Yl XH XL y X: Cost-Volume-Profit (CVP) Analysis
yh− yl ∆y
y=a+bx b= = slope ¿
xh−xl ∆x
Rules:
I – Ignore the outlier.
II – Use x as the basis for high/low.
III – In case of common x, use the one with lower cost.
CORRELATION (r)
Coefficient of Determination (r 2 ) = absolute value
CM ∆CM
CM Ratio ¿ ¿
Sales ∆ Sales
FC FC
BEQ= =
CM /unit S−V
FC
BEQ ( PhP )=
VC
1−
S
FC + Profit
BEQ+Target Profit=
CM /unit
FC
BEQ ( PhP )=
CMR−ROS
MarginOS=Sales−BEQ ( PhP)
FC
BEQ =
WA CM /unit
Op . Income
ROI=
Op . Assets
Op . Income Sales
ROI= ×
Sales Op . Assets
ROI=Margin × Turnover
TRANSFER PRICING
UPPER LIMIT
MAXIMUM TRANSFER PRICE = PURCHASE PRICE
LOWER LIMIT
MINIMUM TRANSFER PRICE = VARIABLE COST PER UNIT + LOST CM PER UNIT
= SELLING PRICE
COST-BASED
VC = VC
FC = VC + FM + FNM
FAC = VC + FM
Cost-Plus = VC / FC / FAC + Mark-up
MARKET-BASED
NEGOTIATED PRICE
ARBITRARY PRICE
I – MANUFACTURING EFFICIENCY
Prevention-------------------Before Production
Appraisal --------------------After Production
Internal Failure-------------Before Delivery
External Failure------------After Delivery
III – PRODUCTIVITY
IV – MARKET EFFECTIVENESS
AQ X AP AQ
SPV %AS=
AQ X SP ATS X AS ATS
SVV MSHV
SQ X SP SVV ATS X SS
MSIV
STS X SS (x CM/u) SQ
%SS=
STS
QUANTITATIVE TECHNIQUES
I – GANTT CHART
II – PERT-CPM
EOQ=
√ 2 DO
C
Annual OC=
Annual Demand
EOQ
×C /order
EPR ( ELS )=
√ 2 DS
C
Annual CC=Order ¿ ¿ × CC /unit ¿
2
* Ave . Invty=Order ¿ ¿ 2 ¿
EOQ
Ave . Invty= +SS
2
Beg . Invty + End . Invty
Ave . Invty=
2
SS= ( Max . Usage per time− Ave . Usage per time ) × Lead time
FINANCIAL MANAGEMENT
OCB=
√
2 × Annual Req .× C /t
Oppotunity Cost
Annual Req .
HC= Ave . Cash ×Oppotunity Cost
OCB
TC = × C/t Ave .Cash=
OCB 2
FLOAT
IV – LEVERAGE
k ( cost of capital ) (WACC )=Minimum required rate of return; minimum acceptable rate of return; cut-off rate; target rate;
desired rate of return; standard rate; hurdle rate
IO
PBP= BPBP=PBP with estimated salvage value each year
Annual NCF
PV -CF
NPV =PV - CF−IO PI =
IO
IRR=%PV - CF=IO
k cl¿ % (1−Tax %)
D1
k cs¿ + g D 1=D 0(1+ g)
Net MV
D1 D1
k PS ¿ k cs-RE¿ + g *gross of flotation costs
Net MV MV
IRR = Discounted CF rate of return; time-adjusted rate of return; sophisticated rate of return
ARR = Book rate of return; unadjusted rate of return; simple rate of return; approximate rate of return;
FS rate of return
FINANCIAL STATEMENT ANALYSIS
SINGLE-PRODUCT COMPANY
AQ X AP AP
SPV ∆ Unit SP
AQ X SP AQ SP
SVV ∆ Unit Sales
SQ X SP SQ
GPV
AQ X AC AC
CPV ∆ Unit SP
AQ X SC AQ ∆ Unit Sales SC
CVV
SQ X SC SQ
MULTI-PRODUCT COMPANY
SVV TAQASP
SQ X SP
GPV
AQ X AC
CPV
AQ X SC
CVV TAQASC
SQ X SC
II – FINANCIAL RATIOS
BS = Average
IS = Current
RULES ON FORMULAS:
Total Assets
Capital Intensity Ratio=
Net Sales
EBIT
¿ Interest Earned=
Interest Expense