In this lecture, you will learn the different types of sales variances and how they are related (the hierarchy).

An important questions when calculating sales variances is what base to use for calculating the variance. Should it be Selling price or Profit. This lecture will explain precisely when and why you use each of the two bases for calculation.

You will learn about the different possible scenarios for variance calculation that are used commonly used in businesses.

In this lecture, you will learn about the impact changes in costs have on the calculation of Sales variances, and why changes in cost per unit are excluded from the course

Calculate sales price variance in Excel

Calculate sales volume variance in Excel

Calculate sales quantity variance in Excel

Calculate sales mix variance in Excel

Learn what is change in Profit margin or %

Lets look at an example to see what drives a changes in the Profit % for a business, and what changes result in no impact on the profit %. 

How to calculate the variance in profit % as a result of changes in price

How to calculate the variance in profit % as a result of changes in product mix.

A more in depth discussion and review of calculations for changes in profit margin % arising as a result of changes in prices, cost and Mix. This first video includes very important and key discussion on what impacts the profit margin % and how the % number being a fraction changes differently versus the regular dollar variances.

Introduction to the model being used to calculate the impact on Profit margin % as a result change in Price, Cost and Mix.

We use the model created, narrow down on changes in price vs prior year and how it impacts the profit margin %. Note that the calculation can also be used for calculating profit margin % change vs budget by replacing PY data with Budget data.

We use the model created again, narrow down on changes in Costs vs prior year and how it impacts the profit margin %. Note that the calculation can also be used for calculating profit margin % change vs budget by replacing PY with Budget data.

This time we look at the Quantity Mix vs prior year and how it impacts the profit margin %. Note that the calculation can also be used for calculating profit margin % change vs budget by replacing PY with Budget data.

Change in Quantity Mix is not the only mix that impacts the Profit Margin %. There is another mix, which is the $ mix and this changes with change in price and costs too (as long as the total quantity of units is different from prior year or budget). We look at why and how this mix impacts the profit %.

In this course, you will learn how to calculate variance in Sales $ (all variances including price, quantity and mix) by making a small change in your existing calculation.

In this course, you will learn how to calculate variance in Cost $ by making a small change in your existing calculation.

In this course, you will learn how to calculate all the variances including profit and sales $ and margin $ vs prior period, by making small changes to the existing file.

An introduction to summarising variance results.

Learn how to summarise the results of variances in the form of a table that can also be used to create charts and graphs later.

Now, we learn a great way to present the total variances results in the form of one the most popular charts, the waterfall chart in Excel versions 2016 or later (where the waterfall chart is available as an option in Excel already).

In the previous lecture, we learnt how to create a waterfall chart for total sales variances. In this lecture, we learn how to create waterfall chart for each individual product, and how this is slightly different from the total variances chart.

In the 2016 version of Excel, Microsoft introduced the waterfall chart. However, in many companies, still, older versions of Excel are being used. If you are working with one of the older versions of Excel too, then in this lecture, we learn how to manually create a waterfall chart in the older versions which looks exactly similar to the auto-generated waterfall chart in newer Excel versions.

Now that we have created waterfall charts for our variances, lets learn how we can embed these charts into Microsoft Powerpoint so that the powerpoint slides automatically reflect changes in data and charts every time new information is available.

You have learnt all about the variances and how they can be calculated. However, if you cannot tell what they mean, or what actions business needs to take, all this information is of no use. In this lecture, we anlayse all the variances we calculated deeply and summarise them for management. In addition, we ask insightful questions and make recommendations so that management can take decisive action to improve results and profitability. This lecture will truly enhance your business partnership side, which is the most valuable and most sought after skill for the Accounting and Finance professional.

Once you have learnt how to calculate variances and what they mean, light bulbs will go off and you will have many questions to ask; many ways in which you can slice, dice and then present information. In this lecture, we discuss, some of the additional factors that impact a business's sales and profitability. Keeping these factors in mind and performing additional analysis on them will help you go a long way in providing insightful analysis for your business.

Answering a question I receive a lot about what if we sold a new product (that was not budgeted or sold in prior year), or discontinued selling a product which we sold in prior year or was included in the budget. In this lecture I share my recommendation to deal with such a situation in terms of profit $ and % calculation.

Learn how to perform income statement variance analysis versus budget and prior year. Calculate impact on gross profit margin and net profit or EBITDA margin %, using Excel and the example income statement used for analysis in the video.

Congratulations on completing the course and a big thank you.