Chapter 10
Analyzing Profit Behavior
In This Chapter
Navigating a profit map
Analyzing profit efficiently
Exploring ways to improve profit
Trading off profit factors
Business managers need a sure analytical grip on the fundamental factors that drive profit. And because profit is an accounting measure, chief accountants should help the business’s managers understand and analyze profit performance. The trick is not to overload managers with so much detail that they can’t see the forest for the trees.
Now, don’t get me wrong. Detail is necessary for management control; managers need to keep their eyes on a thousand and one details, any one of which can spin out of control and cause serious damage to profit performance. But too much detail is the enemy of profit analysis for planning and decision-making. Management control requires gobs of detailed information. Management decision-making, in contrast, needs condensed and global information presented in a compact package that the manager ...
