What Does Relational Database Mean?

These relational databases (RBD) are built within a framework of different elements such as tables, rows, columns and records. Tables are the essential piece, since they gather all the information about a particular element. That element has many different categories or fields that are also organized trough columns and each of these attributes have values that are recorded in rows.

These records are also known as Tuples and the way they relate to other records located in different tables across the database is classified as One to One, One to Many, Many to One and Many to Many. These relationships are established to determine how the data interacts and how it will be displayed and organized when a consultation procedure is executed.

Finally, these RBDs are built on an interface called Structured Query Language (SQL). In business, these databases are frequently employed to develop administrative systems to handle all the company’s financial information and Customer Relationship Management software to manage client’s relationships.

Example

A small company that manufactures paper bags wants to organize the details about its operations more professionally. In order to do that, they studied relational databases to develop a simple MS Excel-based system that allows them to have updated information about customers, inventory and orders. They started by identifying each of these 3 as tables. The customer table, containing all personal data about the client; the inventory table containing all data about products, quantities and prices; and finally, the order table containing all transactions.

Each of these tables will have different categories, like the inventory one has name of the product, size, color, historical cost and price and each of these columns will be filled with data about each of the products sold by the company. Finally, these elements will relate between each other properly to have a working system that allows them to make consultations about the businesses’ progress.

The post What is Relational Database? appeared first on My Accounting Course.

What Does Quantitative Analysis Mean?

What is the definition of quantitative analysis? Using complex financial and statistical models, this analysis quantifies objective business data and determines the effects of a decision on the business operations. With respect to investing, this approach quantifies trends following patterns and strategies of high-frequency trading to identify the correlation between the variables and determine the worthiness of an investment.

The most commonly used forms of quantitative analysis in business are the cost-benefit analysis, the break-even analysis, the statistical analysis, and the feasibility study.

Let’s look at an example.

Example

Business decision-making involves monitoring a firm’s operational performance and taking a business decision that can improve operational results. However, if the quantitative results do not justify the decision taken, a manager has to change the variables and use a different approach to a business problem.

For example, Philip, a manager at a leading publishing company, wants to change the outlay of one of the company’s most successful magazines. Philip believes that this change will bring enormous traffic to the magazine, thereby increasing the firm’s profitability.

The cost of changing the magazine’s outlay is estimated at $80,000, and it includes the fees of the professional design firm that will undertake the project. Philip takes into account the company’s extended customer base, its distribution network, and its branches overseas. By performing a cost-benefit analysis, Philip estimates that the new magazine outlay will increase the firm’s profitability by approximately $225,000, which makes a minimum profit of $225,000 – $80,000 = $145,000. By subtracting the advertising costs of $15,000 the minimum net profit will be $130,000, which is, in fact, 62.5% return on investment.

Based on the analysis, Philip will proceed with his business decision.

Summary Definition

Define Quantitative Analysis: An economic tool used by management and investors to analyze financial events and make investment and business decisions.

The post What is Quantitative Analysis? appeared first on My Accounting Course.