Great video! One comment: it seems plausible that there could be an interaction between two or more of these variables. For example, it could be the case that due to the tax cut, a company changed its pricing strategy, which then affected its top line. However, the analysis result here seems to imply that, even if there had been no tax cut, revenue's share in the change in net income would have been the same, which I think is a bit of a logical leap. I would always at least check my conclusions against a company's 10-K if it's publicly listed.
Excellent question. Every company is different, but let's say you're looking at a retailer like Dollar General. You could analyze the change in sales to see how much came from organic growth (same-store sales) versus opening new stores.
I would consider a Sensitivity analysis a "what if" analysis along some variable(s) (tax rate, profit margin...). Cause-of-change analysis is calculating the single components of (actual) change between an item from one period to another. Or what do you think?
Never thought of breaking it out like that!
1. Do this for your company.
2. Plot the data in a pie chart as a %.
3. Get promoted.
4. Easy raise.
I believe a waterfall chart is more suitable.
Great video! One comment: it seems plausible that there could be an interaction between two or more of these variables. For example, it could be the case that due to the tax cut, a company changed its pricing strategy, which then affected its top line. However, the analysis result here seems to imply that, even if there had been no tax cut, revenue's share in the change in net income would have been the same, which I think is a bit of a logical leap. I would always at least check my conclusions against a company's 10-K if it's publicly listed.
Why COGS was not considered on cause of change analysis? Specially sometimes it is one of the main drivers to increase profit if optimized ?
Sames question here, is it the same process if we use expenses as the variables?
Nice video. But where and how should we pinpoint the factors causing changes in sales.
Excellent question. Every company is different, but let's say you're looking at a retailer like Dollar General. You could analyze the change in sales to see how much came from organic growth (same-store sales) versus opening new stores.
Great vid.
Some people call this a 'Sensitivity analysis'.
I would consider a Sensitivity analysis a "what if" analysis along some variable(s) (tax rate, profit margin...). Cause-of-change analysis is calculating the single components of (actual) change between an item from one period to another. Or what do you think?
Cool. Would you get the same results if you change the order of variables analyzed?
yes
So helpful, thanks
Glad it was helpful!
Awesome!
Thank you my friend!
Brillant!
Thank you!
great video, how did you get that 63% under EBT
Net Income divided by EBT
Is your excel file public?
would it be possible to share the Excel document?
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