In business and investing, the margin of safety is the amount of buffer that you have above your breakeven target (for a deal) or the intrinsic value of a stock (for investing) to ensure that …
Continue readingAuthor: MarginHound
Pros & Cons of Matching Price as a Retailer
In the wide world of retail, every product or business seems to need some kind of a unique value scheme these days. They need something to set their specific product or brand apart from all …
Continue readingHow To Calculate & Use Unit Contribution Margin
Unit contribution margin is the difference between the average selling price of a unit of product and the variable cost of making and delivering that unit. This represents the incremental “contribution” of an additional unit …
Continue readingThinking at the Margin – 5 Practical Examples
While accountants are trained to provide a full view of what happened to the finances of a business, an economist or business analyst will speak of “thinking at the margin”. To “think at the margin” …
Continue readingManage Your Mix: How To Calculate Weighted-Average Contribution Margin
The weighted average contribution margin of a company or business unit is the amount by which an incremental unit of net sales contributes to total profit. For a single product business, the contribution margin is …
Continue readingHow To Turnaround A Failing Business
If you run your own business and it has all been plain sailing, then you are one of the lucky few. Most businesses have their peaks and troughs, and most must fight their way out …
Continue readingFundamentals of A Margin Call: Variation Margin vs. Initial Margin
If you routinely trade on margin, using broker leverage to magnify your returns, margin calls should be viewed as an expected event. Every position has the risk of moving against you to the degree that …
Continue readingBalancing Cost vs. Value in Pricing Strategy Consulting
While this advice is admittedly self serving, I’ve grown very skeptical of the recent trend of B2B Pricing Consultants pairing off with B2B Pricing Software Companies as “strategic partners”. The issue isn’t the pricing software. …
Continue readingHow To Calculate Wholesale Price (Speaking As A Distributor)
Sometimes you want to set the record straight. So speaking as someone who has led pricing at four companies, three of which were wholesale distributors – most of what is written about how to calculate …
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