This report provides you with revenues, costs and profit information at the company, market and product levels.
The Profit & Loss statement of your company is illustrated in Figure 11 and is explained below.
•Revenues: Number of units sold x Average selling price. The selling price is equal to the retail price (your decision) minus the distributors’ margin.
•Cost of goods sold (COGS): Number of units sold x Unit transfer cost. The transfer cost is equal to the base cost of the underlying R&D project minus the productivity gains.
•Inventory costs: Inventory holding cost + Inventory disposal loss
•Inventory holding costs: Units in inventory x Unit transfer cost x Inventory holding cost in % (given in the market news report).
•Inventory disposal loss: Loss incurred when selling inventory to a trading company because of a product upgrade. Units in inventory x Unit transfer cost x Inventory disposal cost in % (given in the market news report).
•Contribution before marketing (CBM): Revenues – COGS – inventory costs.
•Contribution after marketing (CAM): CBM – advertising media – advertising research – commercial team costs (your decisions).
•Market research studies: costs of the market studies purchased during the period (your decision).
•Research & Development: budgets allocated to R&D projects during the period (your decision).
•Marketing initiatives: costs of the marketing initiatives implemented during the period (your decision).
•Interests paid: Interest paid on loans granted in previous periods.
•Exceptional cost or profit (ECP): Exceptional items such as product withdrawal costs.
•Net earnings: CAM – market research studies – R&D – interests paid – ECP.
Figure 11 –Financial Report – P&L statement
The Market and Product Contribution reports are similar to the company profit & loss statement. They provide financial elements for each marketed product as well as the consolidation of all products by market. A sample product contribution chart is shown on Figure 12.
Figure 12 – Financial Report – Product contribution