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Session 9 - Sales Analysis

This document provides an overview of sales and cost analysis frameworks. It discusses analyzing sales by organizational level, product type, account type, and distribution channel. It also covers budgeting, forecasting, target setting and comparing performance over time. Costs are analyzed using various approaches like full costing, contribution margin and activity-based costing. Productivity, receivables management, credit terms and collection procedures are also summarized.

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Subhadeep Paul
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81 views16 pages

Session 9 - Sales Analysis

This document provides an overview of sales and cost analysis frameworks. It discusses analyzing sales by organizational level, product type, account type, and distribution channel. It also covers budgeting, forecasting, target setting and comparing performance over time. Costs are analyzed using various approaches like full costing, contribution margin and activity-based costing. Productivity, receivables management, credit terms and collection procedures are also summarized.

Uploaded by

Subhadeep Paul
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Sales & Cost

Analysis

Session IX
Dated : 15th September 2008

1
Sales Analysis Framework

Sales Analysis

Organisational
Types of Sales Type of Analysis
Level of Analysis

Zones Comparison with


Total sales
Regions - within Organisation
Type of Product sales
States - Industry & Competitors
Type of Account Sales
Districts - Forecasts
Type of distribution Sales
Territories - Quotas
Order size Sales
Accounts - Previous Period

2
 Selling Budget
 Achievement

3
 Percentage of Sales Method

 Objective and Task Method


 Zero Based Budget

4
Classification Actual Target Actual %achieved %achieved
2007- 2008 2008 – over 07-08 over 08
08 -09 09 -09

Salaries
Commissions
Bonus
Travel
Lodging
Food
Miscellaneous
Recruiting
Training
Promotions
Advertisements

5
 Profitability Approach
 Income Statement Approach
 Full Cost Approach
 Contribution Approach

6
 Full Cost Approach  Contribution
 Sales approach
 (-) Cost of Goods Sold
 Sales
(-) Direct Selling  (-) Cost of Goods Sold
Expenses (-) Direct Selling
(-) Allocated portion Expenses
of shared Expenses
= Contribution Profit
= Net Profit

7
Activity based Costing [ ABC ]

8
Return on Asset Managed [ ROAM ]

 ROAM
 = profit contribution as percentage of
Sales * Asset turnover rate


= (profit contribution / Sales) *
(Sales / Asset managed)

9
Productivity Analysis
 Increasing output with the same
level of Input

 Maintaining the same level of output


by using lesser input

10
Receivable

11
Objective of credit
 Credits are extended to
 Generate sales
 Non availability of ready cash with them
 Generate cash from customer & pay back

 Protect current level of sales


 Expand sales
 Bring down sales cost
 Generate additional profit

12
The credit dilemma
 Credit extended have
 Sales generated
 Cost increased
 Collection cost
 Capital cost

 Delinquency cost

 Default cost

 Negative effects on the profit of the


firm

13
Credit Analysis
 Obtaining Credit Information
 Internal source
 External source
 Financial statements
 Bank references

 Trade references

 Analysis of credit information

14
Credit terms
 Credit period
 Credit limit
 Cash discount

15
Receivable Collection
 Policy of collection
 Follow up systems
 Preparation of Accounts Receivable statements
 Age-wise breakup of Accounts Receivable
 Personal visit for follow up
 Letters of reminders
 Involvement of collection professionals
 Legal remedies

16

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