Optimizing the Income Statement With Integrated Advanced Analytics To Truly Maximize Profit … and More: Reimaging the Enterprise Master Plan

• Author: Alan Dybvig
• Published date: 01 September 2015
• DOI: http://doi.org/10.1002/jcaf.22082
• Date: 01 September 2015

65

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22082

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Optimizing the Income Statement

With Integrated Advanced Analytics

To Truly Maximize Profit … and More:

Reimagingthe Enterprise Master Plan

Alan Dybvig

In the May/June

2014 issue of

this journal, an

article was published

entitled “Enterprise

Master Plan: Next-

Generation Planning

With Activity-Based

Costing.” The tag line

to the article was:

Imagine relaxing

the assumption

of a fixed sales

forecast to solve

for the optimum

level of sales

and marketing

spending that will

provide the maxi-

mum profit and

return on invest-

ment. This article

and case study explains

how. (© 2014 Wiley

Periodicals, Inc.)

Since then, two things have

conspired to warrant a follow-

on article.

1. The article has

been honored as

one of the top 12

all-time articles

published in the

Journal of Corpo-

rate Accounting &

Finance (JCAF)

and was featured

in the “Best of

JCAF” May/June

2015 issue.

2. This author real-

ized, since publi-

cation, that there

were a number

of related issues

unaddressed in

the original article

that the JCAF

readership would

probably nd

informative. Four

of them will be

detailed in this

article:

The author of this article suggests that an opti-

mized income statement (OIS) is the very embodi-

ment of “advanced analytics” and, as such, rep-

resents the next generation of financial planning.

Further, an OIS assures all the related annual

planning application (e.g., Financial Planning and

Analysis, Sales and Operations Planning, and

Marketing Mix Modeling) are harnessed to the

maximally profitable forecast supported by the

optimally feasible and sustainable supply chain

required for the forecast’s fulfillment. Finally, the

chief financial officer (CFO) is being increasingly

seen as the appropriate person responsible for

the employment of advanced analytics. The CFO

(1) owns the data, (2) normally uses analytics, and

(3) serves as the primary guardian of “representa-

tional faithfulness” of reported data.

© 2015 Wiley Periodicals, Inc.