Profitability evaluation is a component of enterprise useful resource planning ( ERP ) that permits administrators to forecast the profitability of a proposal or optimize the profitability of an current project. Profitability evaluation can anticipate gross sales and profit potential specific to points of the market reminiscent of buyer age teams, geographic areas, or product varieties.

Watch Out For…Before you get began, you or your bookkeeper should have prepared an earnings (or profit and loss) statement for your business. The techniques to which we will be introducing you on the next pages are meant to make your revenue statement more comprehensible and significant for you. If an income statement has not been prepared, the information under on developing a typical measurement revenue statement will not be of much relevance, and the data you want for break-even analysis could also be missing.

Profitability is closely related to revenue , however it’s …