Understanding Profit Drivers
and Growing Profitability
Bruce Ratner, Ph.D.
As finance departments continue to grow in strategic importance, they are cognizant of the fact that they are seating on a “goldmine” of data that are not being tapped to understand their profit drivers (important predictor variables) and grow their profitability (the desired target variable). The purpose of this article is two-fold. Firstly, I present the traditional statistical approach of finding key drivers. However, this approach is not strong enough for the necessary data mining that would uncover undetected profit-predictive relationships. This knowledge can be used for predictive modeling with the traditional method. Thus, secondly, I apply the data mining muscle, and the alongst predictive power of the new machine learning method – the GenIQ Model© – for Financial Intelligence gathering.
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