Improve profitability and cash flow for small business, even the one-person operation, by applying proven methods.
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The Secret -- Online Business Version. Click. Expect the unexpected.


Improve profitability and cash flow for small business, even the one-person operation, by applying proven value engineering methods.

This Profit Sensitivity Analysis Will
Reveal Strengths And Weaknesses

This profit sensitivity analysis is an essential bottom line tool that instantly exposes a company's strengths and weaknesses. It works by applying rigorous value engineering principles to financial statements.

This straightforward financial analysis is a little-known (and unfortunately little-used) business tool to help managers determine where to apply limited resources to maximize the profitability of the company.

It's relatively easy to prepare such an analysis from financial statements. This business tool is a variation of value engineering using techniques advocated by the Society of American Value Engineers (SAVE).

Real Life Example

Following is a typical sensitivity analysis for a small business (annual sales of $12,000,000). It shows the percentage change in profitability caused by a 1% increase in the factor concerned, other factors remaining constant.

Real life example of profit sensitivity analysis

In this instance, the company's management mistakenly placed extraordinary emphasis on controlling fixed costs instead of variable costs, which have a much greater effect on profitability than do fixed costs.

The value-focused sensitivity analysis helped show them that they needed to redirect their scarce resources to controlling variable costs, thus eventually improving profitability.

On many pages, you'll see paired images like these urging you to...
Use only proven methods... To really master cash flow.
They appear simply as a reminder of the basic premise of my site, which is to use proven methods only to build and improve the cash flow of your online business. Learn more. Contact me.

Please contact me if you have any questions about using this profit sensitivity analysis to improve your Internet business cash flow.

Go to the Cash Flow Management page from
this Profit Sensitivity page
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