Sales, Inventory, Profitability Analysis

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This screen allows you to run a profitability report for a product or a set of products by analyzing the gross profits from sales, the volume of sales, and the average value of your inventory.

To access this report generation screen, navigate as follows:

* From the Main Navigation screen,
* Click: Financials Icon > Reports Tab
* In the Inventory section,
* Click: Sales, Inventory Profitability Analysis -- link to report page.

Then, fill in the form:

* Enter the Product ID, or the first part of the ID for a set of products, to be analyzed.  If you
    leave this blank the analysis is performed for all products that were sold in the period.
* Enter a specified date range or a pre-configured fiscal time period.  You may
    manually enter the "From" and "Thru" dates or search for the dates using the 
    calendar widget, or you may also use a fiscal time period by selecting it from
    the drop down menu.  
* Select the Fiscal Type (for example, "Actual" or "Budgeted") from the drop down
    menu, to run the profitability analysis for actual results or for the budgets and
* Click: [Run] button -- to run the profitability analysis for return on equity (ROE)  

Clicking the [Return to Reports] button will take you back to the Reports Main Screen.

The report table that is produced includes these data items for each product in the report:

  • Product ID
  • Sales Volume -- the revenue from sales
  • COGS -- cost of goods sold
  • Gross Profit -- revenue minus COGS
  • Beginning Inventory
  • Ending Inventory
  • Average Inventory -- part of the assets
  • Turnover -- Sales divided by Assets
  • Annualized Turnover
  • Profitability Ratio -- profit margin divided by equity

This report is based on a metric similar to The Du Pont formula of profitability analysis, but in this case the report uses gross profit margin for a particular set of products, and turns for that product inventory. Thus, the report is for incremental gross return on inventory assets, a measure of relative product performance.