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activity analysis |
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Definition of activity analysisactivity analysisthe process of detailing the various repetitive actions that are performed in making a product or
Related Terms:Asset activity ratiosRatios that measure how effectively the firm is managing its assets. BARRA's performance analysis (PERFAN)A method developed by BARRA, a consulting firm in Break-even analysisAn analysis of the level of sales at which a project would make zero profit. Cluster analysisA statistical technique that identifies clusters of stocks whose returns are highly correlated Common-base-year analysisThe representing of accounting information over multiple years as percentages Comparative credit analysisA method of analysis in which a firm is compared to others that have a desired Credit analysisThe process of analyzing information on companies and bond issues in order to estimate the Discriminant analysisA statistical process that links the probability of default to a specified set of financial ratios. Factor analysisA statistical procedure that seeks to explain a certain phenomenon, such as the return on a Fundamental analysisSecurity analysis that seeks to detect misvalued securities by an analysis of the firm's Horizon analysisAn analysis of returns using total return to assess performance over some investment horizon. Horizontal analysisThe process of dividing each expense item of a given year by the same expense item in Mean-variance analysisEvaluation of risky prospects based on the expected value and variance of possible outcomes. Multiple-discriminant analysis (MDA)Statistical technique for distinguishing between two groups on the Performance attribution analysisThe decomposition of a money manager's performance results to explain Pro forma capital structure analysisA method of analyzing the impact of alternative capital structure Regression analysisA statistical technique that can be used to estimate relationships between variables. Scenario analysisThe use of horizon analysis to project bond total returns under different reinvestment rates Sensitivity analysisanalysis of the effect on a project's profitability due to changes in sales, cost, and so on. Technical analysisSecurity analysis that seeks to detect and interpret patterns in past security prices. Vertical analysisThe process of dividing each expense item in the income statement of a given year by net VERTICAL ANALYSISA financial analysis technique that relates key amounts on the income statement and balance sheet to a 100 percent or base figure for the present and previous year. Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. Ratio analysisA method of analysing financial reports to interpret trends and make comparisons by using ratios – two numbers, with one generally expressed as a percentage of the other. Sensitivity analysisAn approach to understanding how changes in one variable of cost–volume–profit analysis are affected by changes in the other variables. Variance analysisA method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved. Ratio analysisA method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison. activity based costing (ABC)A relatively new method advocated for the capital investment analysisRefers to various techniques and procedures Ratio AnalysisThe process of using financial ratios, calculated from key accounts activitya repetitive action performed in fulfillment of business functions activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received activity centera segment of the production or service activity drivera measure of the demands on activities and, business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay correlation analysisan analytical technique that uses statistical cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course cost driver analysisthe process of investigating, quantifying, incremental analysisa process of evaluating changes that least squares regression analysisa statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares non-value-added (NVA) activityan activity that increases the time spent on a product or service but that does not increase its worth or value to the customer Pareto analysisa method of ranking the causes of variation sensitivity analysisa process of determining the amount of change that must occur in a variable before a different decision would be made value-added (VA) activityan activity that increases the worth of the product or service to the customer variance analysisthe process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences Regression analysisStatistical analysis techniques that quantify the Activity-based costing (ABC)A cost allocation system that compiles costs and assigns Pareto analysisThe 80:20 ratio that states that 20% of the variables included in an break-even analysisanalysis of the level of sales at which the company breaks even. credit analysisProcedure to determine the likelihood a customer will pay its bills. scenario analysisProject analysis given a particular combination of assumptions. sensitivity analysisanalysis of the effects of changes in sales, costs, and so on, on project profitability. simulation analysisEstimation of the probabilities of different possible outcomes, e.g., from an investment project. Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. Failure analysisThe examination of failure incidents to identify components Break-Even AnalysisAn analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero). Financial Trend AnalysisProcess of analyzing financial statements of a company for any continuing relationship. fixed expenses (costs)Expenses or costs that remain the same in amount, attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
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