Tag: Pricing

Debit Memorandum (memo)

See Also: Credit Memorandum (memo) Account Reconciliation Credit Sales Chart of Accounts (COA) Accounting Principles Account Reconcilement Definition Debit Memorandum (Memo) Definition A debit memorandum or memo is a form or document, sometimes called a debit memo invoice, that informs a buyer that the seller is debiting or increasing its amount in the accounts receivable,

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Capital Asset Pricing Model

See Also: Cost of Capital Cost of Capital Funding Arbitrage Pricing Theory APV Valuation Capital Budgeting Methods Discount Rates NPV Required Rate of Return Capital Asset Pricing Model (CAPM) The Capital Asset Pricing Model (CAPM) is an equilibrium model that measures the relationship between risk and expected return of an asset based on the asset’s

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Arbitrage Pricing Theory

See Also: Cost of Capital Cost of Capital Funding Capital Asset Pricing Model APV Valuation Capital Budgeting Methods Discount Rates NPV Required Rate of Return Arbitrage Pricing Theory Definition The arbitrage pricing theory (APT) is a multifactor mathematical model used to describe the relation between the risk and expected return of securities in financial markets. It computes

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Binomial Options Pricing Model

See Also: Intrinsic Value- Stock Options Common Stock Definition Preferred Stocks Dispersion Risk Premium Binomial Options Pricing Model The binomial options pricing model is a tool for valuing stock options. Starting with certain given values, and making certain assumptions, the model uses a binomial distribution to calculate the price of an option. The binomial method

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Absorption Cost Accounting

See Also: Semi Variable Costs Standard Costing System Variable vs Fixed Cost Absorption Cost Accounting Absorption cost accounting (also known as the “Cost-Plus” approach), is a method that is centered upon the allocation of Manufacturing Cost to the product. This method is important for situations when a company needs to decide if it can be

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Should You Pay Attention to Economic Indicators?

An article published recently in the Journal makes the case that smaller companies should pay attention to certain economic indicators, such as the Producer Price Index (PPI), unemployment rates, and consumer confidence. Yet most smaller companies take what the market will bear, and sell and buy in markets which are impacted by much more narrow

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Pricing Strategies & Tactics Day 3

Day 3 at Northwestern University’s Pricing Strategies & Tactics course. Learn how activity based costing combined with segment sales analysis can drive profitability. Pricing Strategies & Tactics Day 3

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Pricing Strategies & Tactics Day 2

On Day 2 at Northwestern University’s Pricing Strategies & Tactics course we discuss segmenting your customers and applying Activity Based Costing to those segments to drive profitability. Pricing Strategies & Tactics Day 2

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Pricing Strategies & Tactics Day 1

View the highlights from day 1 at a course I am taking at Northwestern University on Pricing Strategies and Tactics. I will try to highlight the key “take aways” and how to apply them to drive profits. Pricing Strategies & Tactics Day 1 To learn how to price for profit, download our Pricing for Profit

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Do You Know Who Your A-List Customers Are?

Do you know who your A-list customers are? I was in a board meeting last week when I heard an interesting story from one of the other board members. Mike recalled when he was a young man and developed an interest in electrical work. While continuing to work at his day job, Mike developed a

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If They Will Buy, Then I Will Sell!

If they will buy, then I will sell! Or stated another way, if I can sell it then buyer beware! That seems to have been the motto for the sub prime mortgage industry. Over the past five years a looming crisis has been in the making. Mortgage brokers would originate the loan then immediately pass

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