ERP Glossary - E: Earnings to Expenses

Earnings

In accounting terminology, the same as profits, usually reported each quarter, for publically held companies.

Earnings Per Share

The mathematical quotient of earnings divided by the outstanding number of stock shares. Another measure of investment performance.

E-commerce

E-commerce refers to all business activity conducted over the internet. With advances in security, banking, and on-line ordering systems, e-commerce continues to grow and currently represents 5% of all retail sales.

EDI (Electronic Data Interchange)

Electronic data interchange is a structured exchange of information between two organizations, conforming to agreed upon standards. Although time intensive and tedious to set up and test(because of its exacting nature), once established EDI can automate a wide variety of administrative tasks, efficiently, and with a high degree of accuracy.

EIS (Executive Information System)

Executive management system refers to the concept of assembling all critical business measures in an-easy-to-see (or easy-to-retrieve) format, often referred to as a dashboard. EIS is often an emphasized feature in an ERP sales pitch; it is one of the few tangible outputs that appeals to the ultimate decision-makers.

EOQ (Economic Order Quantity)

A logical number based on financial reasoning that minimizes production costs, taking into account inventory risk and inventory carrying costs. Full truckloads, substantial set up costs, or machine capacities might all be inputs into an economic order quantity calculation.

EVA (Economic Value Added)

Economic value add is the numeric difference between the rate of return on operations and the current cost of capital. If the difference is positive, it means that the company is creating tangible value, and increasing shareholder wealth; if the difference is negative, the company is underperforming shareholders would do better investing elsewhere.

Expense

Expense is the same as cost. ERP costs coupled with underfunding are one of the decisive reasons for ERP failure.

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Phil Marshall

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Phil Marshall