April 2010
Beginner to intermediate
250 pages
4h 34m
English
Content preview from Finance: Fast Track to Success
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T3 PARETO PROFILING
What is it?
Pareto profiling is a tool for analysing the true profitability of products, customers and suppliers.
Why use it?
As organisations develop, they often add new customers, products and activities, but they are often poor at stripping out unprofitable ones. This is made worse by the fact that most performance systems support the continuation of historic activities (i.e. salespeople are incentivised on sales – often without any true measure of how profitable the sales are). In addition, standard costing systems tend to hide the true profitability (or unprofitability) of areas of the business.
How do you use it?
So how do you start? Simply order your product list (or customers or suppliers) on a spreadsheet from high ...
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