Profitability Framework Cheatsheet

Profit
(maximise)

Revenue

Price
Pricing Strategy
1. Competitor analysis
2. Cost based pricing
3. Value based pricing

Costs

Variable Costs

Qty

Increase Qty / Product Mix

Segment by customer base

Unit Cost

This cheatsheet will give you an edge in your consulting career, so dont share it with your friends.
Tom Spencer 2016

Decrease Costs
Draw out value chain to see all costs

Fixed Costs

Raw Materials
Shipping
Energy

Qty

SG&A
Rent / Interest
R&D, Depreciation
Labour (fixed contract)

Expanded Profitability Framework Cheatsheet

Return on
Invested Capital
(maximise)

Profit
(maximise)

Invested Capital
(minimise)

Net Assets

Net Working
Capital
NWC = Cash
+ Accounts Receivable
+ Inventory
Accounts Payable

This cheatsheet will give you an edge in your consulting career, so dont share it with your friends.
Tom Spencer 2016

Fixed Capital