Company & Planet

Company & Planet

April 17, 2020
how-to-change

The Company and the Planet

The following relationships rule the interaction between the Company and the Planet.

COMPANY

  • The Company has Investors
  • that own Shares
  • that decide how to manage a Facility
  • that implements a bAmpli Circuit
  • with at least one bAmpli
  • that handles at least one Cyclo
  • composed by one Stage or more.

PLANET

  • The Planet is a living System
  • populated by Products
  • made by a Process
  • expressed by a bAmpli Circuit
  • with at least one bAmpli
  • that handles at least one Cyclo
  • composed by one Stage or more.

The following diagram clarifies the Company & Planet containerships.

Z1 1 company-planet-2

The corresponding relationships are outlined below:

  • The Company has Investors that are the shareholders.
  • The Investors own Shares that elect Company’s top management.
  • The Facility in this context is not a building!
  • The Facility is a commitment to lend. It is like a credit card that entitles the Company to borrow on demand up to a prearranged limit at a predetermined interest rate. When the Company use the card, it creates an outstanding loan, and each additional charge is a drawdown against the Facility that increases the loan. Finally the Company pays the loan principal, and may also pay an annual fee for the privilege of having the Facility, independently of the loan. This definition is inspired by Eric Evans “Domain Driven Design” book, seen at chapter eight.
  • The Facility designs the bAmpli Circuit in order to manage the Process.
  • The bAmpli Circuit is an abstraction implemented by the Company, similar to an electronic circuit schematic that may be applied to different equipment.
  • The bAmpli Circuit is composed of at least one bAmpli, or Business Amplifier.
  • The bAmpli is responsible for at least one Cyclo, or Gain Machine.
  • The Cyclo is composed of at least one Stage.

Financial Indicators

Initials Indicator Description
RI Return on Investment At initial version, RI is returned to Investors according to their Shares. This simple rule maybe extended in future versions.
I Investment It is all the money that the Facility invests by buying Inventory that will be converted into sales.
NP Net Profit This is the Company NP, considering all the existing bAmpli Circuits inside the Facility.
PS Product Sales It is the cash flow received from the sale of products from each existing Cyclo inside the Facility.
RM Raw Material It is the cash flow that remunerate suppliers from each existing Cyclo inside the Facility.
G Gain This is the rate at which the system generates money through sales. Equals revenue from Product Sales minus Raw Material expenses from each Cyclo inside the Facility.
WF Workforce Company expenses with Labor, related to all bAmpli Circuits that exist in the Facility.
OH Overhead Other fixed costs of the Company, also related to all bAmpli Circuits that exist in the Facility.
OE Operating Expense It is all the money the system spends turning Inventory into Gain. It is the sum of the Workforce and Overhead of the Facility.

Formulas

\( \begin{aligned} RI&=\frac{NP}{I} \\ NP&=(PS-RM)-(WF+OH) \\ G&=PS-RM \\ OE&=WF+OH \\ NP&=G-OE \\ RI&=\frac{G-OE}{I} \end{aligned} \)

Published in Business Amplifier, also e-book and Amplificador de Negócios.