Monday, March 03, 2008

Calculating Gross Profit per Case

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An excellent, straightforward reference for checking the health of your beverage business is calculating your gross profit per case. Many route accounting systems have report functions that will give you an estimate of this figure, but route accounting systems don't take into consideration all of the outside influences; such as samples, free cases, breakage, discounts, promotions, or theft. I use a simple spreadsheet program that will give you the exact figure once you have entered the neccessary sales information. At the end of the month, I enter my individual case sales, gross dollars by individual case, any promotional dollars and then, in a flash, I get my figure. It stands at $4.65 a case at present, which is up substantially from three years ago, when it was a stagnant $3.87. In fact, my margins have also increased a nice 3 percentage points to 26.4%.

Analyzing your gross profit per case will undeniably impact your margins and profits in a positive manner. This simple report will also give you needed guidance in reducing unneccessary discounts, rationalization or elimination of unprofitable SKU's, monthly forecasting and ordering, and a wealth of data about your portfolio.

This program is built using simple excel formulas that you can develop very easily. If you want an example of mine, you can download it here.

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