COST MANAGEMENT INDEX Definition

Bookmark and Share

COST MANAGEMENT INDEX (CMI) is a method for determining cost management benchmarks for public companies using published financial data. It is used to establish realistic cost reduction goals by conducting a definitive comparison of single company performance against others in that industry combined with a thorough internal expenditure analysis. This provides realistic parameters for cost cutting objectives as well as insight into which categories of products and services to target. The CMI equals cost of goods sold plus sales, general and administrative expenses, divided by your operating revenue (CMI = (COGS+SG&A)/Revenue). It is expressed as a percentage.

Learn new Accounting Terms

SIMPLE INTEREST is interest computed on principal alone, as opposed to compound interest which includes accrued interest in the calculation.

NETTING can be the settling of mutual obligations at the net value of a contract as opposed to its gross dollar value; or, the reduction of transfers of funds between subsidiaries or separate companies to a net amount.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.