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Supply Chain Financial Analysis

Supply Chain Financial Analysis. Macc Business Core. Logistics Value. Revenue Growth. Customer Value. Attractive Margins. Shareholder Value. Cost Minimization. Asset Efficiency. Lean Supply Chain. Service Level/Capital/Cost. Transportation/Logistics Companies.

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Supply Chain Financial Analysis

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  1. Supply Chain Financial Analysis Macc Business Core

  2. Logistics Value Revenue Growth Customer Value Attractive Margins Shareholder Value Cost Minimization Asset Efficiency Lean Supply Chain

  3. Service Level/Capital/Cost

  4. Transportation/Logistics Companies

  5. Profit Margin x Market Return R2=.03

  6. Sales Growth x Market Return R2=.13

  7. Asset Utilization x Market Return R2=.35

  8. ROA Return on Assets = Profit Margin x Asset Utilization

  9. The profit margin indicates the rate of profit on each sales dollar. The asset efficiency indicates the rate of sales on each dollar of invested assets. Profit ROA “Profit Machine” Revenues

  10. ROA x Market Return R2=.77

  11. Margin/Utilization Tradeoff CH Robinson., 18.1% ROA Landstar 19.1% ROA Can Pac, 5.7% ROA Can Nat., 6.8% ROA NS 2.9% ROA

  12. Expanded ROA Model Quality Service Functionality Revenues Profit Margin Labor efficiency Overhead support Fuel Expenses ROA Lease vs. Buy Outsourcing Maintenance Asset utilization Capital

  13. Wal-Mart vs KMART (2001) Return on Assets = Profit Margin x Asset Utilization 13% = 5% x 2.60 3% = 1% x 2.37 WalMart KMART

  14. Wal-Mart vs. KMART

  15. A Tale of 3 Computer Co’s. Return on Assets = Profit Margin x Asset Utilization 19% = 11% x 1.68 32% = 11% x 2.89 12% = 10% x 1.17 Compaq Dell Apple

  16. Question: How Many Margin Points is Dell’s Asset Efficiency Worth Over Compaq? Return on Assets = Profit Margin x Asset Utilization 32% = 19% x 1.68 32% = 11% x 2.89 8% Compaq Dell Answer

  17. 3 Computer Co. Asset Utilization Turns: The number of dollars of revenue earned per $1 of asset. Apple: Half their assets are in cash and marketable securities.

  18. U.S. Railroads Return on Assets = Profit Margin x Asset Utilization 4.8% = 13.0% x 0.37 2.3% = 6.0% x 0.39 1.7% = 6.0% x 0.29 2.9% = 9.0% x 0.32 4.9% = 13.0% x 0.38 BN CSX KC S. NS UP

  19. U.S. Trucking Return on Assets = Profit Margin x Asset Utilization 3.3% = 2.0% x 1.667 4.3% = 2.0% x 2.14 2.6% = 1.0% x 2.55 -10.2% = -4.0% x 2.54 Hunt Roadway Yellow Consol.

  20. U.S. Logistics Services Return on Assets = Profit Margin x Asset Utilization 18.1% = 4.0% x 4.52 19.1% = 5.0% x 3.82 CH Rob. Landstar

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