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Product Profitability Analysis Template

1. The document provides instructions for analyzing the profitability of various product lines using a spreadsheet template. 2. It directs the user to enter product data including name, price, unit cost, sales, and costs into the template. Formulas will then calculate metrics like gross contribution and profit/loss. 3. The final steps recommend evaluating the most and least profitable products based on the analysis, and determining how to improve margins for underperforming lines.

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393 views6 pages

Product Profitability Analysis Template

1. The document provides instructions for analyzing the profitability of various product lines using a spreadsheet template. 2. It directs the user to enter product data including name, price, unit cost, sales, and costs into the template. Formulas will then calculate metrics like gross contribution and profit/loss. 3. The final steps recommend evaluating the most and least profitable products based on the analysis, and determining how to improve margins for underperforming lines.

Uploaded by

Suhail
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Product Profitability Analys Instructions:

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) 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. 5. Evaluate Product Profit/Loss and Gross Margin for each product line. (Automatically calculated) 6. Open 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.

ct Profitability Analysis Template

Product Profitability Analysis Template

Product Name
Product 1 Product 2 Product 3 Product 4 Product 5

Price
$1,000 $5,000 $25,000 $50,000 $250,000

Unit Cost
$240 $2,400 $10,000 $34,000 $190,000

Unit Sales
890 213 97 35 12

Revenues
$890,000 $1,065,000 $2,425,000 $1,750,000 $3,000,000

COGS*
$213,600 $511,200 $970,000 $1,190,000 $2,280,000

Gross Contribution
$676,400 $553,800 $1,455,000 $560,000 $720,000

Marketing Costs
$45,600 $69,900 $29,750 $9,500 $123,450

Sales Costs**
$89,000 $106,500 $194,000 $140,000 $90,000

Product Profit/Loss
$541,800 $377,400 $1,231,250 $410,500 $506,550

Gross Margin
60.9% 35.4% 50.8% 23.5% 16.9%

* COGS - Cost of Goods Sold before Sales & Marketing costs. ** Sales Costs - formulas need to be updated to reflect your sales commission percentages.

$3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Product 1 $250,000 $200,000 $150,000 Sales Costs $100,000 $50,000 $0 Product 1 Product 2 Product 3 Product 4 Product 5 Marketing Costs Product 2 Product 3 Product 4 Product 5 Revenues Gross Contribution Profit/Loss

Gross Margin
Product 5 Product 4 Product 3 Product 2 Product 1 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Gross Margin

oss Contribution

Unit Sales
Product 5 Product 4 Product 3 Product 2 Product 1 0 100 200 300 400 500 600 700 800 900 1000 Unit Sales

Marketing Costs

Gross Margin

Unit Sales

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