There are several ways to track profitability by sales. One can use financial ratios such as gross profit margin, net profit margin, and operating profit margin. These ratios provide insights into how much profit is made per dollar of sales. Additionally, one can use break-even analysis to determine the amount of sales needed to cover costs. Another method is to use contribution margin analysis, which looks at the profitability for individual items that a company makes and sells. Specifically, it looks at the sales price of the item minus the variable cost of the item.
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