Finance For The Non-Financial Manager

 Finance For The Non-Financial Manager
4th Edition by Herbert T. Spiro
Breakeven analysis is widely use as a method of managing finances in most managerial
affairs. It is very useful in finding differences between fixed and variable costs, and is highly
recommended whenever the contribution margin per unit is positive. Break-even point
corresponds to the level of profits, which are the equivalent of the fixed and variable expenses on
the specified quantity of production. Frequently, most financial claims are consist of cash breakeven analysis and an assessment of long-term financing options. Break-even analyses are
similarly appropriate in managerial problems dealing with non-profit organizations.
Distribution of existing finances to endeavors, which guarantee profits in the future, is a
major concern of the management, both in profits-oriented and non-profit organizations. This
analysis is named capital budgeting; which uses both the mathematics of finance and the
decision rules. The vital requisite on these analyses is the cautious mind in checking data
estimation. The analysis should scale the costs and benefits with regards to the inflows and
outflows directly related with the project. Nevertheless, the source of financing the project,
whether the funds used are internal or external, does not affect the decision. Discount rates
applied depend on the risk-free rate, furthermore an regulation for project risk. The computer’s
permission on testing the changing assumptions depends on the desirability of capital
expenditures.