Compound annual growth rate (CAGR)

Compound annual growth rate (CAGR) is method used to calculate annual grow rate from time series. The result of CAGR is interpreted as the smoothed annualized growth rate achieved during the considered time horizon. It therefore represents the rate at which the variable would have grown if the rat

Classification of costs according to relationship with the level of production

According to the level of production, costs can be distinguished between: fixed costs variable costs or possibly also semi-variable or semi-fixed costs By having the costs classified between fixed and variable, it is easy to prepare flexible budgets where the costs change with the the ch

Semi-variable costs / Mixed costs

Semi-variable costs or mixed costs are costs that have both fixed and variable components.  They are variable until certain production level, then increase in step and after that grow variably again. (58) They include for example costs with a standing (fixed) fee and a variable comp

Fixed costs

Fixed costs are costs that do not relatively change with the level production over the short term and are incurred even if there is no production. So if the level of production decreases, fixed costs remain unchanged and fixed cost per unit increases, and vice versa. Examples: CFO salary; rent

Categories of profit in IFRS / IAS

Profit (or loss) income   minus expenses →  excluding other comprehensive income and expenses (i.e. Other comprehensive income) (20)   Other comprehensive income incomes not included in the profit and loss   minus expenses not included in the profit an


Vision is a general statement emphasizing where the company wants to be in the future. Vision is often in the form of just one inspirational sentence.

Growth rate

Growth rate is the rate by which the considered variable (revenues, expenses, dividends, investment, GDP etc.) increase either annually or over the considered period of time. It is usually derived from past data and can be calculated by a number of methods. None of the calculation methods is correct

Stepped (semi-fixed) costs

Stepped costs (also known as step cost) or semi-fixed costs are fixed costs which become variable after the production reaches certain level of output. In other words, different fixed rates are valid within different production ranges. An example can be rent of production premises. If the volu

Variable costs

Variable costs are costs that change with the production volume. If the level of production decreases, total variable costs decrease as well and vice versa.  But unit variable costs remain unchanged with the changed production volume. Opposite to variable costs are fixed costs.   Behavi


Goal is the general and brief aim, which the entity wants to achieve over the long-term period, say during the next 5-10 years. Goals do not necessarily need to fully meet SMART definition (Specific, Measurable, Achievable, Realistic, Time-specific), if they are broken down into a set of objective

Average annual growth rate (AAGR)

Average annual growth rate (AAGR) calculates average annual growth rate from time series based on the formula: (grow rate during period 1 + grow rate during period 2 + grow rate during period 3 + …………+ grow rate during period n ) / number of periods of grow   Be c


Mission is a general statement in which is shortly explained how the entity aims to achieve its vision. It contains for example: what the entity aims to achieve (profit, social welfare etc.) definition of key stakeholder groups (mainly customers) and how the company wishes to treat them how it

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