1. Sales Management Marketing Financial Analysis Review - Topic 6

2. What Accounting Does & Does Not Teach Cash Flows Are Essential for Sales Managers Remember the Marketing Concept

3. Profit Equation Profits = Revenues – Costs Revenues = Price * Quantity Sold Costs = (unit cost * unit sold) + fixed costs Sales Costs can be variable, fixed, or single lump sum

4. Breakeven Breakeven = Fixed Costs / Unit Contribution Unit Contribution = Unit Price – Unit Cost

5. Breakeven 2 But we usually want to make at least as much money as before. So…. Breakeven = (Past Profit + Fixed Costs) / UC Or Breakeven = (Target Profit + FC) / Unit Cont.

6. Total Contribution Total Contribution (or total dollar contribution) = total direct revenues – total direct costs This is harder to determine than you expect Essential to what marketers do, can control, and what their expectations are

7. Joe the Salesperson Example

8. Contribution Reminder Unit Contribution is not Total Contribution Be sure to use all of this terminology correctly MONEY IS SERIOUS!

9. Relevant Costs Sunk Costs Relevant Cost Fallacy

10. Risk is Relative

11. Income Statement Review Look at example in notes

12. Balance Sheet Example Look at note example

13. Companies Keep Multiple Sets of Books

14. Profit Does Not Equal Cash Profit is an Opinion Cash is a Reality