This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/product-profitability-analysis-tool-710 We created an Excel-based Product Profitability Analysis tool to analyze each product your company sells. To use this tool, first list out each of the products your company commercializes, and then complete the remaining information that is requested. The information required includes the Product Name, Price, Unit Cost, Unit Sales, Revenues, Costs of Goods Sold, Gross Contribution, Marketing & Sales Costs, Product Profit/Loss, and Gross Margin. Once the information has been entered, you will be presented with a graphical representation of the data. Key Benefits: * Identifies top performing products * Allows you to cut unprofitable product lines * Automatically creates charts * Save 3 hours on formatting * Easily customizable to suit your needs

1. 5. Evaluate Product Profit/Loss and Gross Margin for each product line. (Automatically calculated)
6. View the "Product Charts" tab to view data in a graphical format.
7. Assess which products are most profitable and determine how to increase profitability for poor margin products.
3. Determine product Marketing Costs for each product line and enter into Marketing Costs column.
4. Edit formulas in Sales Costs columns to reflect the actual commission percentages paid to sales representatives.
Product Profitability Analysis Tool
1. Enter Product Name, Price, and Unit Cost in the Product Profitability Analysis tab at the bottom of this spreadsheet.
2. Enter Unit Sales Revenues and Cost of Goods Sold for each product line. (Gross Contribution will be automatically calculated)
Instructions

2. Products Price Unit Cost Unit Sales Revenues COGS*
Gross
Contribution
Marketing
Costs
Sales Costs** Profit/Loss Gross Margin
Product 1 $1,000 $240 890 $890,000 $213,600 $676,400 $45,600 $89,000 $541,800 60.9%
Product 2 $5,000 $2,400 213 $1,065,000 $511,200 $553,800 $69,900 $106,500 $377,400 35.4%
Product 3 $25,000 $10,000 97 $2,425,000 $970,000 $1,455,000 $29,750 $194,000 $1,231,250 50.8%
Product 4 $50,000 $34,000 6 $300,000 $204,000 $96,000 $143,000 $24,000 -$71,000 -23.7%
Product 5 $250,000 $190,000 12 $3,000,000 $2,280,000 $720,000 $123,450 $90,000 $506,550 16.9%
* COGS - Cost of Goods Sold before Sales & Marketing costs.
** Sales Costs - formulas need to be updated to reflect your sales commission percentages. Currently, there is a default 10% sales commission in the formula.
Product Profitability Analysis Tool
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/product-profitability-analysis-tool-710

3. -$100,000 $1,900,000 $3,900,000 $5,900,000
Product 1
Product 2
Product 3
Product 4
Product 5
Revenues Gross Contribution Profit/Loss
60.9%
35.4%
50.8%
-23.7%
16.9%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
Product 1 Product 2 Product 3 Product 4 Product 5
Gross Margin
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Product 1 Product 2 Product 3 Product 4 Product 5
Sales Costs Marketing Costs
890
213
97
6
12
0 200 400 600 800 1000
Product 1
Product 2
Product 3
Product 4
Product 5
Unit Sales
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/product-profitability-analysis-tool-710

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