Steps 5 and 6: Net Profitability Calculations
Introduction to Net Profitability
The next steps are to collate all statistically-estimated effects, (described above),
with any other financial information, such as one-off costs.
If an analysis has both cost and revenue implications, you can combine these into
a profitability analysis. The following sections discuss aspects of such profit calculations.
Basic Profit
As you no doubt know, basic profit is calculated as revenue minus cost. Your first point of interest would be to ensure that the outcome of your statistical analysis is a positive profit. In many business situations, just having positive profit is not necessarily good enough – you would want your profit to be high enough to beat ...
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