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Cost savings, Growth, Cash Flow, NVA Shift, Cost Avoidance

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    Tim
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    These are the five categories commonly used to report Six Sigma financial results.  But how do companies actually report these figures?
    (a) Cost savings and Growth have immediate P&L impact.  NVA and Cost Avoidance have no P&L impact (assuming the project proceeds).  Cash flow only has indirect P&L impact – the carrying costs.  So how to report?  Do companies group them – for instance into direct and indirect P&L impact?  Or how?
    (b) Cash Flow.  Should this really be reporting as ‘P&L impact of Cash Flow’ – applying some % such as 12% for the carrying costs?  I have also seen (though disagree with) the cash flow figure being reported and added to the other categories to give a ‘Total Financial Impact’ figure.
     
    I have my own views on these issues, but would first be interested to hear how other companies report these figures.

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