Calculating contribution of increase/decreasing in %profit

ne30n2 · **Joined:** Sat, 5 Nov 2011 15:03:41 UTC **Posts:** 2

I'm trying to find which product actually make total profit margin increase from Aug to Sep, and to what percentage it make the total
profit margin increase.

Code:

               Aug                    Sep      
Product   Sales       Profit   % Profit        Sales   Profit   % Profit
A              7          5         80%             7      6      81%
B              298        -10       -3%            298    -10      -3%
C              995        54        5%           1,003     53       5%
D              1,968      42        2%           2,149     75       3%
E              2,602      555       21%           2,885    650      23%
F              41          2         5%            41      2       4%
G              1,050      242       23%           1,241    254      20%
Total          6,961      890       13%           7,623   1,029      14%

What I did is that I divided each profit of each product with total sals and find the differences between Aug and Sep as shown below.
The product that has highest differences should be the product that causes the increase. So I conclude that the total profit margin
increase because of product E (0.6% difference). But this is because product E got 95.7 profit increase from Aug to Sep.

Code:

Product        Aug     Sep      Dif(%)  Diff (Profit Aug-Sep)       
A               0%       0%      0.0%       0.1
B               0%       0%      0.0%      -0.1
C               1%       1%      -0.1%     -1.2
D               1%       1%      0.4%      32.9
E               8%       9%      0.6%      95.7
F               0%       0%      0.0%      -0.6
G               3%       3%      -0.1%    -11.9
Total           13%      14%      0.7%

However, as I change sales of product E from 2602 to 1700 as following (which cause profit margin in Aug to increase to 15%), I
dont think my calculation can be applied in this example. Please see below.

Code:

Product   Sales       Profit   % Profit        Sales   Profit   % Profit
A              7          5         80%             7      6      81%
B              298        -10       -3%            298    -10      -3%
C              995        54        5%           1,003     53       5%
D              1,968      42        2%           2,149     75       3%
E              1,700      555       33%           2,885    650      23%
F              41          2         5%            41      2       4%
G              1,050      242       23%           1,241    254      20%
Total          6,059      890       15%           7,623   1,029      14%

If I use the same strategy as previous example, the the decrease in profit margin should come from product G (-0.7% difference).

Code:

Product        Aug     Sep      Dif(%)  Diff (Profit Aug-Sep)    
A              0%       0%      0.0%      0.1 
B               0%      0%      0.0%     -0.1 
C               1%      1%     -0.2%     -1.2 
D               1%      1%      0.3%     32.9 
E               9%      9%      -0.6%     95.7 
F               0%      0%      0.0%     -0.5 
G               4%      3%      -0.7%     11.9 
Total          15%     14%      -1.2%   

Please tell about my calculation correct or not. Thank you.

Denis · **Posted:** Sat, 5 Nov 2011 18:53:30 UTC

Well, if you're a salesman, take it to a financial analyst...

What you're displaying seems to be "some analysis" intended
for a meeting; will be looked at, then forgotten about forever :wink:

> Total 15% 14% -1.2%
You can always make it look more inpressive by baptizing that -1.2%
"Monthly Sales Factor", then refer to it as : "this month's MSF" :idea:

I knowwwwwwww...used to pull such deviousities,
like getting an obscure calculation for the average
turnover of (as example) mortgages, and calling it "The Maturial Factor" ....
At meetings, NOBODY dared questionning it :mrgreen:

ne30n2 · **Joined:** Sat, 5 Nov 2011 15:03:41 UTC **Posts:** 2

Hi Denis,

Well, I'm neither salesman nor a financial analyst. I did this intented for my business. This analysis is quite important for my work. I really hope someone could really answer this math.

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Calculating contribution of increase/decreasing in %profit

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