BUSINESS CONCEPT What Are T-Shaped Skills And Why You Need To Hire A X-Shaped Profile A T-shaped profile is a professional who has broad competencies in several areas, critical to the business, while that same professional has a deep competence in a key area of expertise. An X-shaped profile combines a T-shaped profile and strategic […]
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FRAMEWORK Break-even Analysis A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs. A break-even analysis is a small business accounting process that tells
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BUSINESS CONCEPT Double Entry Accounting Double-entry accounting is the foundation of modern financial accounting . It's based on the accounting equation , where assets equal liabilities plus equity. That is the fundamental unit to build financial statements (balance sheet, income statement, and cash flow statement). The basic concept of double entry is that a single
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BUSINESS CONCEPT What Is The Weighted Average Cost of Capital? WACC in a Nutshell The Weighted Average Cost of Capital can also be defined as the cost of capital. That's a rate – net of the weight of the equity and debt the company holds – that assesses how much it cost to that firm
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BUSINESS CONCEPT What Is Management By Objectives? The Management By Objectives Management by objectives was popularised by notable management consultant Peter Drucker in his 1954 book The Practice of Management . Management by objectives (MBO) is a model used to improve organizational performance by defining objectives agreed upon by both management and employees. The methodology
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BUSINESS CONCEPT Accounting Equation The accounting equation is the fundamental equation that keeps together a balance sheet. Indeed, it states that assets always equal liability plus equity. The foundation of accounting is the double-entry system which assumes that a company balance sheet can be broken down into assets and how they get sources (either through
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BUSINESS CONCEPT Types Of Start-ups Once upon a time, the humble start-up was treated as a small business. However, this comparison proved to be ineffective because of the many organizational and conceptual differences between the two. As start-ups became more fashionable, they were commonly associated with tech companies run by nerds in Silicon Valley. It
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BUSINESS MODEL What Is the Capital Asset Pricing Model? CAPM Framework Explained In finance, the capital asset pricing model (or CAPM) is a model or framework that helps theoretically assess the rate of return required for an asset to build a diversified portfolio able to give satisfactory returns. The Enlightened Accountant by Gennaro Cuofano –
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FRAMEWORK Expectancy Theory Expectancy theory was developed in 1964 by Victor H. Vroom, an organizational behavior expert and current business school professor at the Yale School of Management. Expectancy theory states that an individual is motivated to perform when they expect to derive positive results from their extra performance. If positive results are not anticipated,
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BUSINESS CONCEPT Financial Structure Modeling And Analysis In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability , and cash
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BUSINESS CONCEPT Sphere of Influence In business, the sphere of influence is a list of an employee’s personal and professional contacts whom they consider to be trustworthy. In broader contexts, the sphere of influence of an organization, business, or group determines its power over other organizations, businesses, and groups. The level of power or influence
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BUSINESS CONCEPT What Is Holacracy A holacracy is a management strategy and an organizational structure where the power to make important decisions is distributed throughout an organization. It differs from conventional management hierarchies where power is in the hands of a select few. The core principle of a holacracy is self-organization where employees organize into
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BUSINESS CONCEPT Strategic Meetings Management Strategic meeting management, a concept which was coined back in the year 2004, by the Global Business Travel Association (previously known as the Groups and Business Committee of the National Business Travel Association), has gained widespread adoption in the corporate world. Businesses, as well as corporations all over the globe,
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BUSINESS CONCEPT What Is the Inventory Turnover Ratio? How Inventory Efficiency Can Fuel Business Growth The inventory turnover ratio is a financial metric that tells you how many times throughout a period the company converted its inventories into cash for the business . In fact, that can be calculated either by dividing the sales by
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FRAMEWORK What is Adams’ equity theory? Understanding Adams’ equity theory Adams’ equity theory was developed by behavioral and organizational psychologist J. Stacy Adams in the 1960s. The theory posits that the level of reward an individual receives compared to their own sense of contribution (and likewise for their co-workers) influences their performance. In the workplace,
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BUSINESS CONCEPT What Is The Buffet Indicator And Why It Matters in Business The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It's a measure and ratio to evaluate whether a market is undervalued or overvalued. It's one of Warren Buffet 's
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PROCESS & METHOD Four-step Innovation Process And Why It Matters For Business Innovation The four-step innovation process is a simple tool that businesses can use to drive consistent innovation. The four-step innovation process was created by David Weiss and Claude Legrand as a means of encouraging sustainable innovation within an organization. The process helps businesses
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BUSINESS CONCEPT Product Orientation Businesses that favor the product orientation philosophy assume that product quality is a determinant of demand in the market. In other words, they believe customers will purchase a product based on superior quality, performance, or features – regardless of whether the product suits their individual preferences. Therefore, Product orientation is a
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BUSINESS CONCEPT RevOps Explained RevOps – short for Revenue Operations – is a framework that aims to maximize the revenue potential of an organization. RevOps seeks to align these departments by giving them access to the same data and tools. With shared information, each then understands their role in the sales funnel and can work
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PROCESS & METHOD Cash Flow Statement: Definition Example And Complete Guide The cash flow statement is the third main financial statement, together with income statement and the balance sheet . It helps to assess the liquidity of an organization by showing the cash balances coming from operations, investing and financing. The cash flow statement can
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