1. Comprehensive Profitability Analysis Business Diagnostic Tool – A New Approach “ Superior business results through superior analysis”

4. Operations Profitability Concept (Variable Margin Example) Organization level – variances between the actual and benchmark total variable margin for every P&L item (Sales, Freight, Direct Supplies, etc) Individual P&L item level (i.e. Sales) – variance between the actual and benchmark by revenue/cost driver for the particular item Individual variances level (i.e. Supplier Mix) – presented by customer-product combination Customer-Product variance level – broken down to transactions that caused the variance

5. Operations Profitability Concept (Example) The following example represents the variable margin analysis for a pulp and paper company Organizational Level

6. Operations Profitability Concept (Sales Revenue variance hierarchy)

7. Operations Profitability Concept (Example) The following example represents the variable margin analysis for a paper company Individual P&L item - Sales

8. Operations Profitability Concept (Example) The following example represents the variable margin analysis for a paper company Individual Variances Level – Sales (Top 10 Unfavorable)

9. Operations Profitability Concept The following example represents the variable margin analysis for a pulp and paper company Individual P&L item - Freight

10. Operations Profitability Concept (Example) The following example represents the variable margin analysis for a pulp and paper company Individual Variances Level – Freight (Top 10 Unfavorable)

11. Operations Profitability Concept (Example) The following example represents the variable margin analysis for a pulp and paper company Individual Variances Level – Freight Mode Mix Unfavorable Transactions