Join Rudolph Rosenberg for an in-depth discussion in this video Analyzing overall gross margin performance, part of Financial Analysis: Analyzing the Bottom Line with Excel.
…Like we did with revenue analysis, we are going to start by understanding gross…margin performance from a high level standpoint before going down into…the different dimensions that we can use to better understand the dynamics at play.…In the P&L, gross margin is shown just below the revenue line and…is most of the time displayed in two forms.…The first one is in its dollar form, so…simply the total dollar amount of gross margin for a given period of time.…The second form in which it is displayed is as a percentage of revenue for…the same period of time.…
So, for example, if we generated $10,000 of margin last month for…an overall revenue of $100,000, then we divide $10,000 by…$100,000 and get 0.1 as a result which, in other words, means 10%.…Both forms are equally important.…The dollar form is important because it tells you…how much profits from your products you have generated and…if it is sufficient to cover all the other costs of running your company.…
If you generated $10,000 of gross margin this month and that you have…
Also check out the companion course, Financial Analysis: Analyzing the Top Line with Excel.
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- Finding data points
- Prepping data
- Calculating standard cost and gross margins
- Analyzing overall gross margin performance
- Analyzing individual and overall expenses