Category Archives for Finance

Internal Rate of Return (IRR) Explained

This article will explain IRR, otherwise known as the Internal Rate of Return. Businesses have limited funds to invest, so every business will want to ensure it invests its limited funds in such a way that it generates the best return on its investment. This is precisely what IRR helps you to do. It enables […]

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Net Present Value Explained

Net present value (NPV) is a tool that can help you determine if an investment or project is worthwhile to undertake. Imagine that you’re trying to decide if a project is worth doing. This project will require a one-off upfront cash investment of $5,000 and will return cash over five years as follows: Year 0: […]

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The Kraljic Matrix

The Kraljic Matrix helps you develop a purchasing strategy for the products and services that your organization procures. It aims to maximize your profit while minimizing supply-side risks. The model was first published in the Harvard Business Review in an article titled ‘Purchasing Must Become Supply Management’ in 1983 by Peter Kraljic. However, it was already […]

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Break-Even Analysis

Break-even analysis allows you to understand at what point your sales of a product or service will cover your costs. This point, when your sales cover your cost of doing business is known as your break-even point (BEP). At break-even point, you aren’t making a profit, but you’re not incurring a loss either. Break-even analysis […]

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