Margin management - or the ability to understand where money is made and lost in a business - is critical to the success of all businesses and to middle market firms in particular. Middle market companies are often growing rapidly, yet they typically lack the resources to invest in the enterprise planning tools and advanced analytics leveraged by large cap companies. According to the Q2 2013 Middle Market Indicator (MMI), 85% of middle market executives cite the ability to maintain margins as a somewhat to highly challenging issue. Quarter after quarter, margin maintenance is ranked as a top concern among middle market companies, second only to the cost of healthcare.
To better manage margins and make decisions regarding the supply chain, middle market companies can take advantage of a wide variety of margin management metrics and methods. These tools range from basic measures such as profit margin and contribution margin, to more advanced methods like activity-based costing, cost-to-serve models, economic value added, and balanced scorecard.
For more information on these metrics and methods and how middle market companies are using them to manage margins, download the full report.