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A simple method to analyze the profitability of a United business or a Profit Center

Reserved for expert users

The problem

How to analyze the profitability of a specific Business Unit.

The aggregate accounting data does not allow the contribution to the profitability of the individual Business Units to be recognized. To do this, it is necessary to use the detailed accounting data from which to detect costs and revenues directly attributable to each Business Unit.

The necessary data

From the accounting it is necessary to extract the sub-accounts attributable to each balance. For example, to the Revenue balance, it will be necessary to associate Revenues 1, Revenues 2 ... Revenues N relating to each of the business units as in the simplified example shown in the image

The result

By appropriately using the Reclassification functionality, it will be possible to obtain

The overall result relative to the total Company, which shows a Total Contribution Margin of 41,7% and an Ebitda of 37,5%

The result is relative only to the Business Unit 1, which shows a Total Contribution Margin of 53,3% and an Ebitda of 46,7%

The result is relative only to the Business Unit 2 - Other work, which shows a Total Contribution Margin of 22,2% and an Ebitda of 11,1%

Using the different reclassification models it will be possible to recall the desired analysis model.

Using the same method, the details of Customer Receivables, Supplier Payables, Inventories and other items can also be attributed to the individual BUs

How to do with Leanus

For advanced users only
Process or update the analysis by uploading the detailed accounting situation, which also includes the sub-accounts divided by BU
Get the reclassification and save the model
To obtain the analysis of BU 1, reclassify Costs and Revenues of BU 2 in Balance / Other operating expenses
Save the reclassification template
Recalls the reclassification template saved in step 2
Repeat the operation indicated in point 3 and reclassify the Costs and Revenues of BU 1 in Balance / Other operating expenses
Save the reclassification template

You can now recall the desired analysis model.

For more information view our video session or request a demo

Download here the complete index of the Leanus manual

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