Financial- Net Income Statement - P&L Part 3 Flashcards
What is FMT?
Field material Transfer: Movement of product between location physically and in the system (SAP)
What is FAT?
Fixed Asset Transaction: Movement or changes to the equipment assets within the Fixed Asset Register.
What is MR?
Material Received: Document (either in hard copy or not) resulting from the physical reception of goods or services requested in a Purchase Order (PO) (tickets, Shipping papers).
PCPR
Product cost/Product revenue- Tells you how much we’re making on the products that we sell. The lower the % the more you’re making.
What is Shared cost?
Based on location revenues
Shared costs are calculated by taking all the overhead costs in the respective costs pools and allocating them to the field based on revenue.
As a general rule 100% service revenue, 50% product revenue and 0% reimbursable revenue is used to calculate this (for WPS).
Your district’s revenue is compared to the other district’s service revenue in the cost pool and your allocation is based on your district’s piece of the pie.
Examples of Shared cost.
- Field Segment Mgmt Cost: This is the Area Business Manager Costs & Local Geomarket Segment Manager Costs
- SiNET: charge for global intranet
- OFS Shared Costs
- Segment G&A (General & Administrative): Segment HQ
- Segment R&E (Research & Engineering): Manufacturing/Research & Engineering
- Segment InTouch
- OFS Mgmt/Common Service Costs : Area, GM solutions, & Common Service (Accounting, Marketing)
- Product Group and Other G&A
- Advisory Fees: SL HQ Cost
How is the NIS useful in planning your business activity, preparing forecasts and bids?
Analyzing how much money I am spending (cost), and be able to reduce it, analyzing price books. Analyzing where I am doing more revenue, I can use indication such as PCPR to check if we are selling correctly out chemicals and if I am actually making money with them or I am losing.
Forecasting where I am making more money and where I am expending more money.
Financial Indicators – FSC
Field Segment Contribution
FSC $ = Total Revenue – Total Field Costs
Financial Indicators- ROS
Return on Sales
ROS % = Net Income / Revenue
Measures the % of profit generated from each dollar of revenue.
Financial Indicators-Fall thru (FT)
..% contribution to net income from every additional $ of revenue..
FT= Change in Net income/ change in revenue
The biggest indicator for finance.
This shows us for every extra dollar of revenue earned, how much we get to keep. Currently 32% is a good FT
Indicates how well we are managing costs and how well our assets are working for us
Financial Indicators- ROI
Return on Investment
ROI= Annualized Net Income / Operating Investment
Measures the % of profit generated from each dollar invested.
Financial Indicators-ROA
Return on Assets
ROA = Annualized Net Income / Average Total Operating Assets
Indicates total return on operating assets and measures efficiency in using operating assets.
Financial Indicators-ETR.
Effective Tax Rate
ETR= Taxes/IBT
Rate at which our monthly tax provisions are provided for.
