Purpose

The Profitability Analysis Report gives you profit margins on each of your items according to your reported cost and retail.

To calculate profit margin, the report runs this formula:

• (Unit Retail) - (Unit Cost) = (Profit)
• (Profit) / (Unit Retail) = (Profit Margin)
• (Profit) / (Unit Cost) = (Markup)

One of the benefits of running a Profitability Analysis is that it shows a complete breakdown of profit margins, even if a product's cost changes.

As seen in the example above, if the cost of a product changes, multiple line items will be generated, showing the exact profit made on sales of products, according to their unit cost at the time of purchase.