Differential analysis examines the impact on costs and revenues of specific management decisions by focusing on differential (or incremental) cash flows. It considers only those costs or revenues that will change as a result of a specific decision.
Incremental analysis, also known as differential analysis, is a decision-making tool used in business and accounting to assess the financial implications of different choices by focusing on relevant revenues and costs.
Marginal revenue is the additional income that accrues to an organization as the result of selling an extra unit of sales. It is a critical metric for businesses in understanding the profitability impact of their incremental sales decisions.
