Sales & Gross Profit Variance Analysis (Price, Mix, Volume)
What you'll learn
- What are sales related variances and how do they impact profit of a business? How do these variances help explain business performance?
- How to explain variances resulting from sales price, quantity and product mix differences.
- How to completely explain variance vs budget and previous year in terms of dollar amounts and profit percentage (%).
- How to automate variance calculation in Microsoft Excel so that files can be updated every time a new calculation is required.
- How to summarize variance calculation results in the form of automated graphs/charts.
- How to present the results of variance analysis to management using Microsoft Powerpoint.
- How to analyse and provide recommendations to management based on results of analysis.
- Complete solved Excel files
- A general understanding of sales, cost and profit (Not mandatory).
Do you ever find yourself, in business review meetings, trying to explain the business performance versus budget, or prior period, but not having all the answers? Then, this course is just for you.
Being able to analyse and present the profitability of a business through variance analysis is a key business partnering skill. It can help you identify key business issues and establish your position as a trusted finance business partner to the senior management. This is a must have skill for all finance and business professionals, specially Sales Analysts, Financial Analysts, Accountants, Controllers, CFOs, General Managers and CEOs.
In this course, we take a detailed look at calculating and analyzing variances in sales and gross profit (budget variance analysis and prior period variance analysis), driven by changes in sales prices, sales quantities and product mix. With the help of these variances we will be able to explain precisely the performance gap, both in terms of dollar amounts and profit margin percentages, vs budget and prior period. We will calculate the variances by developing automated Microsoft Excel files. Once all the variances in price, volume, quantity and mix are calculated, we will convert them into charts for presentation, and then analyze in detail each variance. We will also explain performance versus budget and prior year, and then make precise recommendations to improve profitability and business performance.
Here is what you will learn in this course?
- You will be able to explain precisely the variance in amounts for Sales, Cost of Sales and Profit vs budget and vs previous period.
- You will also learn how to explain the variance in Profit margin percentage (%) vs budget and vs previous period, and what impacts the variance in margin points.
- You will learn how to summarize the variance results and present it to management in the form of easy to follow graphs/charts (visualization).
- You will learn how to analyse the results of the variance calculations, and provide recommendations to management (using Microsoft PowerPoint).
- You will start with current period actual sales, cost of sales and gross profit of a company, compared with budget and prior year results.
- You will learn about the hierarchy of sales variances; Sales Price, Volume, Quantity and Mix.
- You will learn how to create Excel templates to calculate all of these variances that are automated and update as soon as new data replaces existing data (this is great for monthly and weekly, or even daily updates).
- You will learn about when to use Selling price, and when to use Profit as a base for calculation.
- There will be quizzes and assignments to test and reinforce your knowledge.
- You will also get downloadable solved variance analysis Excel files, that we prepare during the course lectures.
In summary, by the end of this course, you will be able to explain financial performance vs budget and previous year as a result of changes from sales price, quantities and product mix. You will be able to successfully explain results, and empower decision makers to make informed business decisions based on your recommendations. This will save you a lot of time and effort, and is likely to have a significantly positive impact on your confidence and career growth.
You can achieve this mastery of explaining variances in sales and profitability as soon as tomorrow, or your next meeting, if you take this course now.
So, don't wait and start learning by enrolling for the course, right now.
Hope to see you inside the course!
Who this course is for:
- Anyone interested in explaining financial performance vs target or previous period driven by sales variances
- Financial Analysts
- Sales Managers and Sales staff
- Sales Directors
- General Managers and Managers of Operations
- CFOs and CEOs
Currently working as the Finance Manager and Controller of a global manufacturing firm, I started my accounting and finance career over 16 years ago, as an Audit associate in one of the big 4 audit firms. As I progressed in my career over the course of time, I was lucky to have worked with multiple medium to large size and diverse organisations, and gained insightful practical experience in accounting, corporate finance and controller ship.
Earlier in my career, I found several challenges as I transitioned from theory and bookish knowledge to its practical implementation in the real life. My aim now is to share my knowledge and experience gained over the course of my career, with anyone who is struggling with the same challenges as I did earlier in my career. I do love teaching and think it is the best form of learning, and I continue to learn as I teach more and more talented youth and professionals like you.