But for a full analysis, it is important to track the dynamics of all indicators. At the same time, depending on the purpose of the analysis, specialists use gross or net profit, as well as profit from sales.
Regardless of the method of analysis and the kuwait whatsapp numbers specifics of the indicator, there are no uniform standards for the industry - you need to know how to calculate sales profitability using a formula and evaluate the coefficients relative to these indicators for past periods in your specific organization.
Sales Profitability Analysis
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However, if you have just recently opened a business, it is permissible to use not actual data, but open statistical indicators of competitors or apply a mathematical model to form a business plan.
So, you know how to determine the profitability of sales using the formula, and you have calculated it. Next, you need to analyze the result and compare it with the standard values. This way, you will be able to correctly evaluate the company's performance and its economic potential. Let's look at the types of profitability analysis:
Comparative analysis
It is carried out by comparing individual parameters within the organization or comparing them with competitors' indicators. The results obtained will show how competitive your business is, as well as how interesting it is for investors.
Comparative analysis also allows you to compare different areas of the enterprise’s work and determine which of them bring the greatest profit.
Factor analysis
It shows what impact different factors have on profitability. When conducting this analysis, data from the calculated and previous periods are taken into account. Factor analysis shows the dependence of the result on different indicators and allows finding the optimal solution in terms of expenses and costs, as well as income growth.
Three models are used for comparison: additive, multiplicative and multiple.
The additive model represents the outcome of an indicator as the sum or difference of factors.
In the fractional model, some factors are divided by others.
The multiplicative model involves multiplying a number of indicators.
Index analysis
The comparison is carried out by external factors, allowing to track the dynamics of economic indicators, movement of goods, fluctuations in cost, cost price, productivity, etc. Such analysis allows to evaluate the impact of various indices (expenses, external or internal factors, etc.) on profitability.
For example, to conduct an analysis, indices of variable or constant composition of expenses are used, reflecting respectively temporary and constant costs, structural shifts (changes in profitability arising under the influence of economic and other factors).
How to achieve multiple growth in traffic and sales from your website?
Alexey Boyarkin
Dmitry Svistunov
Head of SEO and Development
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