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.
A strategic choice in business operations regarding whether to produce goods internally or to purchase them from external suppliers. It involves evaluating various factors including cost, capacity, quality, and opportunity costs.
