Terms Flashcards
Diagnostic Analytics
studying past performance to understand “why” something happened
Descriptive Analytics
studying to find out “what” happened. using historical data to understand what changes have occurred in a business over time
Predictive Analysis
determines patterns to forecast future outcomes and trends - proactive and forward thinking: what “will” happen
Prescriptive Analysis
using predictions of known parameters to help figure out likely outcomes. what and will happen, in addition to why
The equation for profit margin
((Revenue - expenses) / revenue ) * 100
what is cash flow; what are the 3 types
the movement into or out of an account
3 types: operational, investment, financing
the equation for Revenue
sales price * units sold
The difference between Revenue and Net Revenue
Net Revenue include discounts, allowances, and returns being subtracted from the number you get for Revenue
Difference between Revenue and Profit
Revenue is just how much you made from selling goods or assets; profit takes in mind the operational costs, etc. Profit gives a better overall picture of financial health
Equation for Net Profit
Revenue - COGS - operating expenses - interest expenses - taxes
what is COGS
cost of goods sold; the underlying amount it takes to make a product
equation for operating cost
cost of goods sold + operating expenses
what is a semi-variable cost
mixture of fixed and variable - partialy increase or derease with production, but still exist when production is zero
what is a variable cost? What’s total variable cost equation
vary with production –> volume discounts, amount you need based on production, etc
= total quantity of output * (variable cost/unit of output)
what is the equation for EBIT? why do we care about it
earnings before taxes and interest
= Revenue - COGS - operating expenses
it is the profit without looking at taxes; investors care about it. it can be used to compare performance across difference sectors
