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Making Financial Models Reflect the Real World
Summary • Financial models are used to forecast future outcomes and make decisions, but they can be flawed if they don’t consider real-world factors. • To reflect real-world factors in financial models, techniques such as using a range of outcomes, random variables, Monte Carlo analysis, sensitivity analysis, scenario analysis and stress testing can be used.…
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Making COBIT Work For IT and Other Business Processes
COBIT (Control Objectives for Information and Related Technology) is a framework that provides a set of guidelines and best practices for IT governance and management. COBIT analysis evaluates and assesses the effectiveness of an organisation’s IT governance and management practices using the COBIT framework. COBIT analysis involves a comprehensive assessment of an organisation’s IT processes,…
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Employing Behavioural Economics Methods to Business Planning
Summary • Behavioural economics is a relatively new field of study that emerged in response to the limitations of classical finance, recognizing that human behaviour is complex and often irrational. • Micro behavioural economics analyses individual decision-making processes and cognitive biases that can influence those decisions, such as overconfidence bias and availability heuristics. • Businesses…
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Effective Use of Operational Planning
Summary • Key Performance Indicators (KPIs) are metrics used to measure the performance of individuals, departments or businesses. KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time-bound). • Goal-oriented planning involves setting clear objectives and developing strategies to achieve them. Goals should be SMART and aligned with the company’s mission and vision. • Top-to-bottom communications…
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Are You Making Great Operating Plans?
An operating plan is a document that outlines the day-to-day operations of a business or organisation, and it typically includes the following key elements: Overall, an operating plan is essential for any organisation to ensure that it operates efficiently and effectively and is aligned with its overall mission and objectives. How does an operating plan…
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