What Is Cost-Effectiveness Analysis?

Cost-benefit analysis is a method of assessing the value of a project by comparing all the costs and benefits of the project. Cost-benefit analysis is an economic decision-making method. The cost-benefit analysis method is used in planning decisions of government departments to How to get the maximum benefit with the least cost in investment decisions. Often used to assess the value of public utility projects that need to quantify social benefits. Non-public industry managers can also use this method to analyze the soft benefits of a large project. In this approach, all costs and benefits of a project or decision are listed and quantified.

Cost-benefit analysis

In the beginning

The basic principle of cost-benefit analysis is: for a certain expenditure goal, propose a number of plans to achieve the goal, use certain technical methods to calculate the cost and benefit of each scheme, through comparison methods, and based on certain principles, choose Optimal decision-making scheme.

Have you encountered the following situations in your work:

The boss's business ideas keep pace with the times and do to us

Yichu Bank's cost-benefit analysis system provides the following functions:

Provide accurate bank customer profit analysis report. Identify the top 20% of customers who have generated 90% of profits for the bank;

Provide accurate bank product profit analysis report. Point out to the bank's decision-making level that the first few products of the bank are the most profitable, what kind of products and services are most needed by customers ..., so as to vigorously develop products to obtain benefits;

Provide advanced cost management system. Through multi-faceted cost management, it effectively controls and reduces bank costs, thereby achieving profit enhancement, and evaluates the performance of various departments and different business links through cost analysis for management decision-making and evaluation;

Provide advanced risk prediction analysis. Through the evaluation of the bank's cost performance, it can avoid bank risks to the greatest extent and make the bank invincible in the new round of competition.

The main functional modules of this system are described in detail below.

1 Cost-benefit analysis of asset business

This section includes the following:

Loan interest income-various types of loan balances * loan interest rates;

Business tax and surcharges-various loan balances * internal fund interest rates;

Internal interest expenses;

Interest income

Loan loss

Net interest income

Fee income;

Exchange gains and losses;

Other operating income;

Management costs;

Business expense;

2 Cost-benefit analysis of debt business

This section includes:

Internal interest income-(deposit-deposit reserve) * interest rate on internal funds

Deposit reserve income-deposit reserve * deposit reserve interest rate

Deposit interest expense-deposits * deposit interest rates

Net interest income

Fee income;

Exchange gains and losses;

Other operating income;

Management costs;

Business expense;

Net profit

3 Performance analysis of financing department

include:

Internal interest income-(deposit-deposit reserve) * internal fund interest rate

Deposit reserve income-deposit reserve * deposit reserve interest rate

Deposit interest expense-deposits * deposit interest rates

Net interest income

Fee income;

Exchange gains and losses;

Other operating income;

Management costs;

Business expense;

Net profit

4 Analysis of customer deposit income

include:

Bank available capital income-(deposit-reserve requirement) * average loan interest rate;

Deposit reserve income-deposit reserve * deposit reserve interest rate;

Customer deposit income;

Interest expense

Net income

Implementation of cost-benefit analysis system

Method: transfer price, activity cost method

The cost-benefit analysis system uses internal capital transfer price and activity cost methods to accurately calculate the production cost of products, calculate product costs and benefits, and accurately calculate the costs and benefits of various departments. The internal transfer pricing pricing model is determined based on the weighted average marginal cost rate of funds or the marginal cost rate of individual sources of funds;

2 Data Acquisition

Connect to any major database today through ODBC;

Graphical interface configuration, simple operation;

Arbitrary selection and configuration of data from the data source;

3 system configuration platform

The configuration platform includes:

1.System initialization, organization information, responsibility center, product information, customer information, cost allocation, transfer pricing, help, etc.

2. Various data parameter configuration, business changes do not need to modify procedures;

Has the following characteristics:

Automatic data collection;

Expense accounts are configured by themselves;

Flexible setting of cost sharing;

Clear and clear organizational information;

Customer and account clearly correspond;

Product information is complete;

The capital bank is well defined;

4 data processing (backstage)

I. Features of system background data processing:

1. Multiple analysis methods to meet different needs

Detailed analysis

Historical analysis: Specify the start and end dates to list period data by month, quarter, and year;

Comparative analysis: Specify any two analysis dates for comparison based on the statistics of the current day, the cumulative number of the current month, and the cumulative number of the current year;

Ranking analysis: Specify ranking digits, ranking methods, ranking indicators for ranking analysis based on the statistics of the day, the cumulative number of the month, and the cumulative number of the year

2. Use financial data analysis models for analysis and comparison

3.Powerful report parameter combination

Specify any statistical analysis date

Specify any level of product classification, customer classification, department classification, etc.

Second, the system background data processing mode:

1. Management cost allocation levels and steps

Vertical apportionment of related departments

Horizontal apportionment among peer related departments

Allocating department management expenses to the products they belong to

2.Product costing model based on cost allocation

Principles for setting allocation criteria-causality, degree of resource occupation

3.Department cost sharing standard

Labor costs-by department size

Equipment cost type and quantity of equipment used by sector

Site Rents-By Office Space

4. Product cost allocation standard

Number of single product accounts as a percentage of all product accounts in the department

The ratio of the balance of a single product account to the total of all product accounts in the department

The proportion of single product transactions to the total product transactions of the department

Proportion of single product transaction volume to total product transaction volume of the department

Weighted average above

5.Product costing model based on activity cost

Cost of key business processes

Proportion of cost of each business product

The actual cost of each business product

Cumulative total product cost

5 report display

The system uses advanced report generation tools to support the production of fixed-format and custom-format reports in various forms.

Features:

Report web browsing, easy to use;

Powerful and wide coverage;

Report types meet management needs;

Rich format to meet actual needs;

Report format and decimal places can be adjusted freely;

Reports can be freely printed or printed.

Cost Benefit Analysis System Features

Collect all kinds of useful data and information in a timely, comprehensive and accurate manner;

Establish various management scientific methods and provide various auxiliary decision-making models;

With strong data multi-dimensional analysis capabilities;

Comprehensiveness, timeliness, traceability and comparability of data;

Support multiple file formats (PDF, HTML, XML, XSL);

Reports are powerful and cover a wide range to meet various practical needs;

Provide shared information resources and implement effective and dynamic management;

Systematic sustainable development and ease of use;

Friendly interface and easy operation;