Week 2 Assignment - Decisions for Quarter One and Quarterly Business ReviewPart I: Decisions for Quarter One. Prior to working on your Decisions for Quarter One, review the following through the Growi

E XPR ESS_17600 | V aria n ce

A s y o u p re pare fo r y o ur fir s t Q uarte rly B usin ess R evie w , th is is th e p ro per tim e to le arn o ne o f th e m ost r e le va nt

t o ols in b usin ess fo r a naly zin g p erfo rm ance . T his is v a ria nce a naly sis , a to ol a t th e h eart o f c o m panie s, b oth

p riv a te a nd p ublic , a cro ss a ll in dustr ie s a nd g eogra phie s. A s th e b usin ess le ader o f H IS C O , y o u w ill b e lo okin g a t

v a ria nce s fr o m th e p ers p ectiv e o f p la nnin g, m eetin g c o m mit m ents , a nd g ro w th . C are ers h ave b een m ade a nd lo st

o ve r th e a bilit y to m eet c o m mit m ents , a nd v a ria nce a naly sis is th e p rim ary to ol in th e b usin ess w orld fo r a naly zin g

t h e a bilit y to m eet c o m mit m ents .

V aria nce a naly sis is a to ol a ll b usin ess le aders h ave to h ave w ork in g k n ow le dge o f. S it b ack a nd e njo y th e

p re se nta tio n. A c o py is a va ila ble in th e s u pple m enta ry r e adin g m ate ria ls , a s is T R I E quatio n # 2 , w hic h is d evo te d

t o v a ria nce a naly sis .

A g re at p la ce to s ta rt is to s h are a r e al w orld e xa m ple . A nd o ur q uestio n is , h ave y o u e ve r s e en a n O M v a ria nce

w alk ? T his is a to ol a ny b usin ess le ader, r e gard le ss o f fu nctio n, n eeds to h ave a w ork in g k n ow le dge o f. T he

e xa m ple h ere is fr o m In gers o ll- R and. Y ou w ill b e u sin g v e ry s im ila r m odels in y o ur m anagem ent le aders h ip o f th e

H IS C O C orp ora tio n. O ur g oal is to ta ke y o u fr o m th e a ca dem ic w orld o f s ta ndard b re ak-e ve n a naly sis to th e

c o rp ora te w orld o f v a ria nce a naly sis to ols th at a re u se fu l fo r p la nnin g v a ria nce s, m eetin g c o m mit m ent v a ria nce s,

a nd g ro w th v a ria nce s.

A v e ry r e le va nt q uestio n is w hat e xa ctly is a n a cco untin g v a ria nce . T here a re th re e ty p es o f a cco untin g v a ria nce s

t h at y o u w ill b e e xp ose d to a s th e le ader o f H IS C O . T he fir s t a re p la n v a ria nce . O M is o pera tin g m arg in , a nd in

t h is p artic u la r c a se , th e p la n O M w as $ 120. T he p rio r p erio d O M w as $ 100. S o in y o ur p la n, y o u a re e xp ectin g a

p osit iv e $ 20 v a ria nce .

T he s e co nd ty p e is m eetin g c o m mit m ent v a ria nce s, o r h ow w ell y o u d o r e la tiv e to th e p la n. In th is c a se , th e a ctu al

O M w as $ 110. T he p la n O M w as $ 120. W e h ad s e en th at b efo re . A nd th e m eetin g c o m mit m ent v a ria nce s is th us

m in us $ 10, $ 10 b ehin d p la n.

T he th ir d ty p e a re th e g ro w th v a ria nce s. In th is c a se , th e a ctu al O M w as $ 110 fr o m a bove . T he p rio r p erio d O M

w as $ 100, a nd w e d id g ro w th e b usin ess b y th e p osit iv e $ 10. P le ase n ote th at th e s u m o f th e p la n v a ria nce o f $ 20

a nd th e m eetin g c o m mit m ent v a ria nce o f ( $ 10) d oes e qual th e g ro w th v a ria nce o f $ 10. A s th e le ader o f H IS C O ,

a gain , y o u w ill b e lo okin g a t a ll th re e o f th ese v a ria nce s.

T his is a n e xa m ple o f h ow to c o nstr u ct a v a ria nce w alk . T here is a s ig nif ic a nt a m ount o f c a lc u la tio n n ece ssa ry ,

a lo ng w it h a v a rie ty o f a ssu m ptio ns to c o m ple te a v a ria nce w alk , w heth er it is fo r p la nnin g, m eetin g c o m mit m ent,

o r g ro w th p urp ose s. T his s a m ple e xa m ple is to d em onstr a te th e p ro ce ss. T he a ctu al c a lc u la tio n ta ke s p la ce w it h in t h e F P&A a re a o f fin ance . F P&A is fin ancia l p la nnin g a nd a naly sis . T he k e y fo r a ny b usin ess le ader is th e

i n te rp re ta tio n o f th e v a ria nce s. T his e xa m ple is w hat w ould b e c a lle d g ro w th v a ria nce s a s w e g o fr o m y e ar-to -y e ar

a ctu als .

W e a re n ot g oin g to g o in to a ll th e d eta il, b ut w e'll le ave th at fo r y o ur r e vie w in th e s u pple m enta ry r e vie w

m ate ria ls . Y ou c a n a ls o s e e T R I E quatio n # 2 in th e s u pple m enta ry r e vie w m ate ria ls th at h as th is e xa ct e xa m ple

f o r y o ur p eru sa l. T he b asic v a ria nce s a re p ric e , v o lu m e, c o st, a nd p ro ductiv it y . A nd in th is e xa m ple , b ase d u pon

t h e a ssu m ptio ns o n th e le ft h and s id e o f th e s cre en, th is is w hat in cre m enta l v a lu e o f e ach w ould c o ntr ib ute to th e

o ve ra ll g ro w th fr o m y e ar to y e ar. A nd in th is e xa m ple , y o u c a n s e e it w as a to ugh p ric in g e nvir o nm ent. W e d id

g ro w o ur v o lu m e. C osts in cre ase d, a nd p ro ductiv it y w as th e r e al w in ner.

N oth in g b eats s e ein g r e al w orld e xa m ple s. W e'll n ow b e ta kin g a lo ok a t a v a rie ty o f c o m panie s a cro ss g lo bal

i n dustr ie s a nd g eogra phie s. W hile th eir v a ria nce s m ay s u btly d if fe r, a ll o f th e v a ria nce s te nd to c lu ste r u nder th e

f o ur a fo re m entio ned h eadin gs o f p ric e , v o lu m e, c o st, a nd p ro ductiv it y . O ur fir s t is C ooper S ta ndard , a s u pplie r to

t h e lig ht v e hic le m ark e tp la ce . O ur s e co nd is D elp hi, a noth er s u pplie r to th e a uto m otiv e m ark e tp la ce . O ur th ir d is

I n gers o ll- R and, th e c o m pany w e h ad s e en e arly o n. In gers o ll- R and g oes fr o m g olf c a rts to T herm o K in g to T ra ne

t o A m eric a n S ta ndard .

B H P B illit o n, a n A ustr a lia n c o m modit y b usin ess. W hat's v e ry n eat a bout th eir v a ria nce a naly sis is h ow th ey

d eco m pose th e v a ria nce s in a r is k m anagem ent fr a m ew ork in to u nco ntr o lla ble a nd c o ntr o lla ble . P le ase n ote th at

p ric e is a n u nco ntr o lla ble v a ria nce fr o m th eir p ers p ectiv e . P enta ir . P enta ir r u ns fr o m w ate r filt e rs a nd p um p

s yste m s, a nd is a w id e u se r o f v a ria nce a naly sis . A nd if y o u lo ok s p ecif ic a lly a t th eir v a ria nce s, r e ve nue g ro w th

t h ere w ould b e v o lu m e. T here 's p ric e , in fla tio n, w hat w e c a ll c o st. A nd th en th ere is , fin ally , p ro ductiv it y . A nd th ere

i s a fin al b ucke t c a lle d s tr a te gic in ve stm ent.

T oyo ta is n eat b eca use o f h ow th ey b rin g in th e im pact o f fo re ig n e xch ange. T oyo ta , o f c o urs e , is a v e ry g lo bal

c o m pany im pacte d b y e xch ange r a te s a s e ve ry th in g, w heth er it s e uro s a nd d olla rs , g ettin g c o nve rte d b ack in to

y e n. A nd fo re ig n e xch ange c a n h ave th e s a m e d egre e o f le ve ra ge a s p ric e . A nd fin ally th ere is G E. In th is

p artic u la r e xa m ple fr o m th eir 1 0-K , y o u c a n s e e th e in cre ase in th eir o pera tin g p ro fit fr o m y e ar to y e ar. A nd th e

d riv e rs o f a ll o f th eir v a ria nce s, a nd h ow th ey b re ak it d ow n in to th e a fo re m entio ned b ucke ts . A ll te rrif ic e xa m ple s,

a nd fo r y o u fo lk s to s e e th at th is is a to ol a pplic a ble to a ll ty p es o f b usin esse s a cro ss a ll g eogra phie s a nd in dustr ia l

s e cto rs o f th e g lo bal e co nom y.

E ve ry q uarte r, y o u w ill s e e fr o m a m eetin g c o m mit m ents p ers p ectiv e w here y o u a re r e la tiv e to p la n. In th is

e xa m ple , w e w ill d elv e in to th e s p ecif ic d riv e rs y o u w ill b e d ealin g w it h a nd th e p rim ary d ecis io ns y o u m ake e ach

q uarte r o f th ose d riv e rs . It a ll s ta rts w it h y o ur p re ta x in co m e p la n, o r y o ur c o m mit m ent. T he to ta l v o lu m e v a ria nce , t h e in cre m enta l v o lu m e r e la tiv e to p la n, c a n b e s p lit b etw een g ro w th a nd m ark e t s h are . V olu m e im pacts b oth

s a le s a nd c o st. T he g ro w th v a ria nce a ssu m es th at m ark e t s h are is th e s a m e a s in p la n. T he m ark e t s h are

v a ria nce s is th e c o m ponent o f th e o ve ra ll v o lu m e v a ria nce w hen a ctu al m ark e t s h are d evia te s fr o m p la n.

I n th is e xa m ple , th e v o lu m e v a ria nce w hen g ro w th a nd s h are a re c o m bin ed w as v e ry c lo se to th e p la n b eca use

t h e s u m is c lo se to z e ro . T he p ric e v a ria nce is a ctu al p ric e r e la tiv e to p la n. In th is e xa m ple , a ctu al p ric e w as h ig her

o n a ve ra ge th an th e p ric e in p la n a cro ss a ll v o lu m e. N ote , h ow eve r, th at th is c o uld n egativ e ly h ave im pacte d

m ark e t s h are . C ost in fla tio n is d riv e n b y la bor r a te s a nd / o r th e p ric e o f r a w m ate ria l c h ip s c o st r e la tiv e to p la n. In

t h is e xa m ple , th e n egotia te d p ric e o f th e r a w m ate ria l w as, o n a ve ra ge, le ss th an p la nned, a p osit iv e v a ria nce .

C ost p ro ductiv it y c a n b e d riv e n b y p la n tim e, y ie ld o n in sp ectio n lin es, a nd la bor e ffe ctiv e ness r e la tiv e to p la n. In

t h is e xa m ple , p ro ductiv it y w as n egativ e r e la tiv e to p la n a nd s h ould h ave b een c o ntr o lla ble . T he b ase c o st is th e

s u m o f a ll d is cre tio nary c o sts r e la tiv e to p la n. In th is e xa m ple , a ddit io nal m onie s m ay h ave b een in ve ste d in

q ualit y , m ark e tin g, a nd / o r R &D r e la tiv e to p la n to p ro vid e fo r fu tu re g ro w th a nd m ain te nance o f c o m petit iv e ness.

T he in te re st v a ria nce is a ctu al in te re st r e la tiv e to p la n. In th is e xa m ple , th e b usin ess d id n ot b orro w o n a ve ra ge a s

m uch a s th e c re dit lin e w as in p la n, r e su lt in g in a p osit iv e v a ria nce . W hen e ve ry th in g is a dded u p, w e c u rre ntly a re

a t a n a ctu al p re ta x in co m e o f $ 204,0 00, a nd th at is le ss th an th e p la n c o m mit m ent o f $ 545,4 00.

C ash flo w w alk s, w hile le ss fr e quent in p ra ctic e th an o pera tin g m arg in v a ria nce a naly sis , a re o fte n u se d, a nd y o u

w ill e xp erie nce th em a s th e le ader o f H IS C O . C ash flo w c a n b e r e vie w ed in th e T R I C rit ic a l E quatio n # 9 in th e

s u pple m enta ry r e adin g m ate ria l. A s b efo re , n oth in g b eats s e ein g r e al w orld e xa m ple s. W e w ill n ot d elv e in to th e

s p ecif ic c a sh flo w v a ria nce s, b ut a ll fo llo w th e b asic lo gic o f o pera tin g, in ve stm ent, a nd fin ancia l c a sh flo w s a s s e t

o ut in th e T R I C rit ic a l E quatio n o n c a sh flo w .

O ur fir s t e xa m ple is fr o m th e a fo re m entio ned P enta ir . In fa ct, th is p ic ks u p w here th e o pera tin g m arg in a ctu ally

h ad le ft o ff. O ur s e co nd e xa m ple is fr o m A decco , a n H R b usin ess v e ry g lo bal in n atu re . T he th ir d e xa m ple is fr o m

S unE dis o n, a fa ir ly d eta ile d c a sh flo w w alk . B ut w hat is v e ry n eat is h ow th ey d iv id e it in to th e o pera tin g, a nd

i n ve stm ent, a nd fin ancin g a ctiv it ie s. F in ally , y o u w ill b e s e ein g th e c a sh flo w w alk s e ve ry q uarte r w it h in y o ur m odel

a s th e le ader o f H IS C O . Y ou w ill s e e th e b egin nin g c a sh a nd / o r d ebt s it u atio n a s it w alk s to th e e ndin g c a sh o r

d ebt s it u atio n. If y o u h ave p osit iv e c a sh , it w ill b e a bove z e ro . If y o u a re u tiliz in g y o ur c re dit lin e, it w ill b e b elo w

z e ro .

S o in th is p artic u la r e xa m ple , th e b egin nin g c a sh w as a bout $ 48,4 00. A nd th ro ugh a ll th e a ctiv it ie s fo r th e q uarte r,

t h e e ndin g c a sh e nded u p a t n egativ e $ 48,9 00. A nd th at w as th e e ndin g b ala nce o n th e c re dit lin e.

O ne o f th e g re at q uestio ns o n th e d riv e rs o f p ro fit a bilit y is th e fo llo w in g. W ould y o u r a th er h ave a 1 % in cre ase in

p ric e o n y o ur p ro duct s e rv ic e , o r a 1 % in cre ase in v o lu m e? A ssu m in g y o ur p rim ary c o nce rn w as n ext q uarte r's n et i n co m e, th at is , s h ort te rm . N um ber tw o, th at p ric e a nd v o lu m e a re in dependent a t th e lo w le ve ls o f 1 % . A nd th at

3 , y o u h ave th e c a pacit y fo r th e 1 % in cre ase in v o lu m e. A s th e g ra phic s h ow s w it h n um eric a l a ssu m ptio ns b elo w ,

n oth in g b eats p ric e .

I n th is e xa m ple , a nd w it h th e c o st s tr u ctu re in th e a ssu m ptio ns, a 1 % in cre ase in p ric e w ould r e su lt in a 1 0%

i n cre ase in o pera tin g m arg in in d olla rs . V olu m e h as g re at le ve ra ge b eca use 3 % e xce eds 1 % . B ut w it h v o lu m e

c o m es c o st- - s p ecif ic a lly , in cre m enta l v a ria ble c o st. A nd w hen y o u lo se p ric e , th ere c a n b e n oth in g w ors e . T he

m ath em atic s is p erfe ctly n egativ e s ym metr ic . In th is e xa m ple , th e 1 % d ro p in p ric e r e duce s O M in d olla rs b y 1 0% .

T his is n ot to s u ggest it is e asy r a is in g p ric e , b ut to d em onstr a te th e p ote ntia l p ow er o f p ric e . It c a n b e y o ur m ost

p ow erfu l le ve r o f p ro fit a bilit y , a t le ast in th e s h ort te rm .

I n y o ur b usin ess s im ula tio n, H IS C O , y o u w ill b e s e ein g y o ur O M le ve rs o n a q uarte rly b asis . A lw ays r e co gniz e

t h ey a re in th e a bse nce o f c o m petit iv e r e actio n. Im agin e th at y o u w ere in a n o pera tio nal r e vie w , a nd y o u w ere o n

t h e fir in g lin e to e xp la in y o ur r e su lt s . H ere y o u s e e th e p la n d ata . Y our p la n w as fo r s a le s o f $ 100 w it h a n et

i n co m e o f $ 20. T he a ctu al, o r y e ar r o lle d a ro und. Y ou c o uld s e e y o u a re o ff $ 10 o n y o ur s a le s. Y our n et in co m e is

o ff $ 10 a s a v a ria nce . A nd w hen e xp re sse d in p erc e nt, th e m in us 1 0% r e ductio n in s a le s r e su lt s in a 5 0%

r e ductio n in n et in co m e. A nd if y o u h ad to e xp la in w hy y o u lo st, th e e xa m ple is p ric e . A nd w hen y o u lo se o n p ric e ,

s m all c h anges in s a le s c a n r e su lt in a v e ry s ig nif ic a nt r e ductio n in th e n et in co m e o f th e b usin ess, a s th is e xa m ple

s h ow s.

T his is a r e al w orld e xa m ple o f th e lin ka ge fr o m P &L le ve ra ge to a n O P v a ria nce w alk . T he e xa m ple is fr o m

P etr o bra s, th e B ra zilia n o il a nd g as c o rp ora tio n. T he 5 .4 % d ro p in n et r e ve nue r e su lt s in a m in us 2 6.2 % c h ange in

o pera tio nal p ro fit , e xtr e m e n egativ e le ve ra ge th at c o m es fr o m p ric e d ecre ase s, a s s e en in o ur p rio r e xa m ple .

N ote , w hen w e a dd th e v a ria nce w alk , th e v a st m ajo rit y o f th e d ro p in p ro fit is in deed fr o m p ric e , r e fe rre d to a s

p ric e e ffe ct o n n et r e ve nue in th e w alk . T his is n ot u nusu al in c o m modit y ty p e e nvir o nm ents .

I n th e a fo re m entio ned q uestio n, o n 1 % in p ric e v e rs u s 1 % in v o lu m e, th ere w as, a s s ta te d, a n u nderly in g

a ssu m ptio n o f in dependence b etw een p ric e a nd v o lu m e. O f c o urs e , th is c a n b e q uestio ned. A nd c o nce pts lik e

p ric e e la stic it y o f d em and c e rta in ly c a n h old tr u e in th e r e al w orld . W e h ave a ls o s tr e sse d th e im porta nce o f

m eetin g c o m mit m ents , a nd a s th e le ader o f H IS C O , y o u d o h ave a n et in co m e ta rg et w hic h y o u a re w ork in g h ard

t o m eet o r e xce ed. T he m ath em atic s b ehin d th is g ra phic w e c o nsid er to b e o ne o f th e m ost im porta nt e quatio ns in

b usin ess. It is fo und in T R I E quatio n 1 o n p ric in g in th e s u pple m enta ry r e adin g m ate ria l.

T he e sse nce is to d ete rm in e th e in cre ase in v o lu m e n eeded to o ffs e t a p ric e r e ductio n to m eet y o ur o rig in al

c o m mit m ent. W e h ave o bse rv e d o ve r th e y e ars th e a bso lu te s h ock m any s e nio r e xe cu tiv e s h ave w hen s e ein g th is

g ra phic . N atu ra lly , th e im plic a tio n is in it ia tiv e s to p ro te ct p ric e . T hough m any w it h a lo w c o st a dva nta ge m ig ht u se p ric e d efla tio n p ote ntia lly to th eir a dva nta ge. H old in g p ric e c e rta in ly is n ot a n e asy ta sk in c o m petit iv e m ark e t

p la ce s. T he le ft h and a xis r e fle cts p ric e r e ductio n, o r d efla tio n. T he x -a xis r e fle cts th e v o lu m e n eeded to o ffs e t th e

p ric e r e ductio n to m eet y o ur o rig in al c o m mit m ent. T he r ig ht h and y -a xis r e fle cts y o ur o rig in al c o ntr ib utio n m arg in

o r c lo se to g ro ss m arg in in th e p ro ce ss.

S o fo r e xa m ple , w it h th e c o st s tr u ctu re o f a 5 0% C M , o r g ro ss m arg in , a 2 0% r e ductio n in p ric e r e quir e s a lit tle

u nder 7 0% in cre ase in v o lu m e to m eet y o ur o rig in al ta rg et. T his is w here th e s h ock c o m es in . W it h a 4 0% g ro ss

m arg in , o r C M , a s a n a ppro xim atio n, a 2 0% p ric e r e ductio n w ould r e quir e a 1 00% in cre ase in v o lu m e to o ffs e t th e

p ric e r e ductio n. T here is a n u nderly in g a ssu m ptio n o f z e ro v a ria ble c o st in th e m ath em atic s o f th is g ra phic .

I n th e s im ula tio n, w e a lr e ady ta lk e d a bout th e O M le ve rs -- th at's th e fo ur b ars a t th e v e ry to p. A t th e b otto m o f th e

O M le ve rs e ach q uarte r, y o u w ill s e e th e r e su lt s o f th is g ra phic in th e fo llo w in g fo rm . A nd th e w ay y o u r e ad th is is

t h at is th e v o lu m e p erc e nta ge in cre ase th at is n ece ssa ry to o ffs e t a 1 % r e ductio n in p ric e b ase d o n y o ur c u rre nt

c o st s tr u ctu re . O r a lt e rn ativ e ly , th e v a ria ble c o st r e ductio n th at is n ece ssa ry to o ffs e t a 1 % p ric e r e ductio n.

E ve ry q uarte r, y o u w ill fin d s ig nif ic a nt a pplic a tio n o f a ll o f th e a fo re m entio ned v a ria nce a naly sis . In th is p artic u la r

e xa m ple , it is a ssu m ed th at y o u h ave c o m ple te d Q 1 a nd Q 2. Y ou d o s e e th e a ctu al r e su lt s , a nd y o u'r e a bout to

p la y Q 3. In th e u pper le ft h and c o rn er is y o ur m ark e t fo re ca st, w hic h is r e vis e d e ve ry q uarte r a nd d oes d riv e

n early a ll o f y o ur d ecis io ns.

I n th e m id dle b lo ck is in fo rm atio n o n w here y o u a re o n p la n fo r th e y e ar v e rs u s th e a ctu al a nd th e s h ort r a nge

o utlo ok. T he w ay y o u w ould r e ad th is -- fo r e xa m ple , if y o u w ere to lo ok a t th e n et in co m e. Y our p la n n et in co m e

f o r th e y e ar w as a ppro xim ate ly $ 331,0 00. If y o u a ch ie ve d y o ur s h ort r a nge o utlo ok, w hic h is Q 3 a nd Q 4, h ead o n,

a nd th e a ctu al a lr e ady k n ow n fr o m Q 1 to Q 2, y o ur n et in co m e fo r th e y e ar w ould b e $ 122,0 00, a ppro xim ate ly .

C erta in ly le ss th an p la nned. Y ou w ill s e e th is in fo rm atio n fo r s a le s a nd c a sh flo w a s w ell.

I n th e u pper r ig ht h and g ra phic v a ria nce w alk , y o u w ill s e e th e p re ta x in co m e y e ar p la n v e rs u s a ctu al a nd S R O .

T he m id dle b lo ck o f in fo rm atio n h ad b een o n a n a fte r ta x n et in co m e b asis . O n th e lo w er le ft h and g ra phic , th is is

t h e v a ria nce w alk fo r Q 3 r e la tiv e to w here y o u w ould b e o n n et in co m e fo r th e q uarte r r e la tiv e to th e p rio r q uarte r.

T he a ll im porta nt c a sh flo w , w here y o u w ould b e o n e ndin g c a sh a nd / o r d ebt r e la tiv e th e b egin nin g c a sh o r d ebt

b ase d o n y o ur a ssu m ptio ns fo r Q 3, th e c u rre nt a ssu m ptio ns. F in ally , th e e xp ecte d O M le ve rs th at w e h ad

d is cu sse d. A nd n atu ra lly , if y o u c h ange y o ur a ssu m ptio ns a nd m odel th at s h ort r a nge o utlo ok, a ll o f th ese

g ra phic s w ill b e c o ntin ually u pdatin g to p ro vid e y o u w it h n ew in fo rm atio n to h elp in y o ur d ecis io n m akin g.

W e h ave n ow r e vie w ed th e to ol e ntit le d v a ria nce a naly sis th at is w id ely u se d in p ra ctic e . Y our n ext c h alle nge is to

p re pare y o ur Q BR fo r y o ur q uarte r 1 r e su lt s . Y ou m ay w ant to r e vie w T R I E quatio ns 1 , 2 , a nd 9 o n p ric in g,

v a ria nce a naly sis a nd c a sh flo w , r e sp ectiv e ly , a nd / o r th e c o py o f th is v id eo in th e s u pple m enta ry r e vie w m ate ria ls . E xce lle nt s u pportin g m ate ria ls fo r th e Q BR c a n b e fo und in th e e m ails , B usin ess In te llig ence D ash board

w it h c o m para tiv e c o m petit iv e d ata , a nd th e v a ria nce g ra phic s.

F in ally , w hen y o u p ro ce ed to p la yin g q uarte r 2 , y o u w ill fin d th e p la nnin g v a ria nce s v e ry u se fu l a t th e to p o f th e

D ecis io ns p age. T o r e it e ra te , th e e ntir e v a ria nce a naly sis p it c h c a n b e fo und in th e s u pple m enta ry r e vie w

m ate ria ls a lo ng w it h T R I E quatio ns 1 , 2 , a nd 9 .