• Manufacturing , Metrics and Ratios ,
• 15 Mar

Overall Equipment Effectiveness (OEE) is a utilization metric that looks at how productive manufacturing is during it’s scheduled operation. We look at quality, availability and performance as the 3 parts or categories of this metric. This is a great metric for gaining insights on improving manufacturing processes,. We can create benchmarks and determine the drivers

• Finance , Higher Level Management ,
• 15 Dec

Cash Conversion Ratio (CCR) is a liquidity measure that compares the cash generated by a company compared to accounting profit in a given period. You may also hear this metric called the Cash Conversion Rate. It is often used in manufacturing type industries.  We can understand the financial health of a company using CCR. This

• Finance ,
• 14 Nov

Cash value added (CVA) determines the residual cash generated in excess of the required cash flow return on investment (CFROI). It is the cash version of Economic Value Added (EVA) and was created by the Boston Consulting Group. The Boston Consulting Group considers this a further evolution of the EVA while still acknowledging it’s own

• Finance ,
• 12 Oct

We use Price-to-Research Ratio to compare the R&D spending to the company’s market value. In this way we can compare companies that are different sizes. The idea is that the more they spend on R&D in relation to their market value, it signals a greater effort towards innovation and will hopefully continue to create long

• Corporate Strategy , Economics , Finance , Higher Level Management ,
• 26 Sep

Economic Value Added (EVA) is a profit metric. It was created by the consulting firm Stern Value Management. The big difference between EVA and regular profit is that EVA takes into account the cost of capital. It shows the amount of economic value added with a positive value or destroyed with a negative value. This

• Data Science , Programming , Tips and Tricks ,
• 11 Sep

This article covers how to create a virtual Python environment and run a jupyter notebook inside it. This is a great idea when you have problems installing packages,  or need a test  or isolated dev environment. You can see what breaks when you upgrade libraries and versions in Python before learning it in a live

• Accounting ,
• 31 Aug

Absorption Costing is helpful in calculating the value of inventory on the Balance Sheet and determing the selling price of products. We also call this Full Costing. There are two big differences between this and Variable Costing. One is that we add in fixed costs to derive the total cost per unit. The other is

• Accounting , Finance ,
• 17 Aug

Variable Costing is used in internal Managerial Accounting, Cost Accounting and Finance to help make decisions. It is a part of calculating the Contribution Margin and Break-Even Analysis.  It is similar to absorption costing except that we leave out fixed manufacturing overhead. GAAP and IFRS do not allow Variable Costing in external reporting. The main

• Accounting , Economics , Finance ,
• 09 Aug

Calculating Foreign Exchange gains and losses is important for companies that do business internationally. We won’t get into complicated Forex trading but look at how exchange rates changing over time can affect your accounts receivable and accounts payable. We’ll also define basis points and work them into our discussion. Why do we have gains or

• Economics , Finance , Higher Level Management ,
• 14 Jul

Payback Period is a “quick and dirty” method of calculating how long it will take to recoup an investment given the assumption or knowledge of future cash in-flows. You essentially have two pieces to this equation, the money you invested and the cash flows that come in each year. If it’s consistent cash flows coming