Sales, Inventory, Profitability Analysis
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 forecasts. * 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.