It takes more than quarterly meetings with your accountant to know what is going on. Do you want to do everything you possibly can to ensure the survival and growth of your company? Of course you do. Well, one of the most essential skills that you can bring to your company is understanding, tracking, and using certain numbers. This numeracy--thinking in numbers--is a vital, vital skill. Read more »
BREAK-EVEN ANALYSIS – How It Helps You Judge Risk
This is a tool that is sometimes overlooked, even though it is easy to use and gives you valuable information in a number of different contexts. The break-even tells you in dollars or units what amount of sales you need to achieve in order to recoup all your fixed costs or investment. I am always amazed, when I visit MBA classrooms, at how few students take the time to make these relatively simple calculations. Are you trying to decide whether to proceed with a new product introduction? Are you trying to understand exactly where costs stop and profits start for your company? Are you trying to decide whether to buy a company? In all of these cases, the break-even analysis should be your tool of choice. Read more »