From the course: Corporate Finance: Profitability in a Financial Downturn
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Setting off-limit topics
From the course: Corporate Finance: Profitability in a Financial Downturn
Setting off-limit topics
- In every spend analysis project there are two kinds of spend, there's addressable spend and unaddressable spend. Addressable spend is the stuff that you can attack. Those are the categories where you can have an impact and can look at potential places to cut costs. But unaddressable spend are the categories that you can't touch, that might be completely off-limits for any number of reasons, and no matter what, they're out-of-bounds for your project. There are a few different reasons why different categories might be unaddressable and off-limits in a spend analysis project. The first is the topic might be above your pay grade. This includes things like executive compensation, stock dividends, or lay offs. Those are just too important and too far above you. The second category could be unavoidable spend, like raw inputs, commodities that are priced broadly in the market, like corn for a cereal company or oil for a refinery.…
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