Cost savings, Growth, Cash Flow, NVA Shift, Cost Avoidance
August 13, 2001 at 4:00 am #27653
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.0
The forum ‘General’ is closed to new topics and replies.