Calculating contribution of increase/decreasing in %profit
Hi,
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.
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.
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.
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 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).
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 me how to solve this. Thank you
Question asked by: ne30n22Asked on: 06 Nov 2011
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Question Keywords
profit increasedecreasing contribution calculating
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