financial-efficiency

Vocabulary Word

Definition

Just like how a car uses fuel, businesses use money. When a car is efficient, it uses less fuel to travel the same distance. Similarly, 'financial efficiency' is when a business uses less money to make the same profit.

Examples in Different Contexts

In corporate finance, 'financial efficiency' refers to how effectively a company uses its resources to generate income. A CFO might assess, 'We need to improve our financial efficiency by reducing unnecessary expenses and optimizing operations.'

Practice Scenarios

Business

Scenario:

Our costs are spiraling upward, and this is straining our budget. We need to rethink how we allocate our resources.

Response:

I agree, we should look for ways to improve our financial efficiency and reduce unnecessary spending.

Tech

Scenario:

The research and development budget seems to be producing less innovation. Maybe we need to reassess our investment priorities.

Response:

We might want to consider shifting some resources to high-impact projects in order to improve our financial efficiency.