What Is Return on Sales (ROS)? Return on sales is a financial analysis ratio that calculates how efficiently a company is generating profits from its top-line sales revenue. It provides insight into a company’s performance by analyzing the percentage of total revenue that is converted into operating profits. As a […]
Financial Analysis
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What Is the Marginal Rate of Transformation (MRT)? Marginal Rate of Transformation measures opportunity cost. It shows how many units of one product you need to curtail to make one unit of another. In other words, MRT deals primarily with economic priorities given limited available resources. The marginal rate of […]
What Is Incremental Analysis? Incremental analysis is a business decision-making tool that examines alternative choices based on marginal cost differences between them. Incremental analysis is used in business to determine the true cost difference between alternatives. This technique is also known as the relevant cost method, marginal analysis, or differential […]
JIT Meaning – Just in Time Inventory and Manufacturing JIT Meaning: JIT or just-in-time commonly refers to an inventory and manufacturing strategy. It aligns raw-material orders from suppliers directly with production schedules and usage. Companies employ this inventory and manufacturing strategy to increase efficiency and decrease waste. Receiving goods only […]
What is Price to Free Cash Flow? Price to free cash flow is an equity valuation tool that compares a company’s market price per share to its free cash flow per share (FCF). This metric is very similar to the price to cash flow valuation metric, but it is considered […]
What Is Segment Margin? Segment margin is the amount of profit or loss generated by one component of a firm. Knowing the gross margin for the whole firm is not usually sufficient in huge corporations. However, knowing the segment margins for each division of the firm offers a more realistic […]