An overview of the marginal analysis as an instrument in making management decisions

Abstract

The article discusses the importance of marginal analysis as a tool for making management decisions in modern market conditions. Marginal analysis is presented as a method that allows assessing the impact of various factors on the company's profit, optimizing the cost structure and pricing policy. The study is based on a theoretical analysis of economic literature and empirical data on the production and financial activities of JSC «IC «Kazakhmys».

The use of the Direct-costing method made it possible to divide costs into variable and fixed, which ensured the accuracy of calculations of key financial indicators, including the break-even point, the marginal income ratio and the degree of operating leverage. The analysis showed that the company's marginal income ratio is 0,137, and the safety zone reaches 60,4%, which indicates its financial stability. However, the high share of variable costs (86% of revenue) limits the company's flexibility in the face of changing market conditions.

Based on the data obtained, recommendations for optimizing management decisions were developed. Among them are the revision of reinsurance conditions, the introduction of technologies for the automation of loss settlement processes and the adjustment of pricing policy. The use of scenario analysis made it possible to assess the company's possible financial results in various market conditions, emphasizing its ability to adapt to external changes.

The results obtained confirm the importance of regular use of marginal analysis in management practice to increase profitability, minimize risks and strategic planning. The tool helps not only to diagnose current financial indicators, but also to predict their development, ensuring the company's sustainability in an unstable economic environment