Profitability analysis
Completion Date:
Project Overview
Beata is a retail stores with branches across the country and also does online sales for furniture’s, office supplies and Technology equipment’s which they sell to retail, small business and big corporates. The company’s revenue has been growing steadily from 2016 to 2019. Whereas most business rely on revenues to measure performance, the true measure of a company’s performance and health is the profitability which then translates into the business strategy and yields the optimum return to the shareholders.
The main goal of the project was to analyze the profitability of each business strategy and item at the smallest level for Beata Retail store and to be able to reflect the performance, I measured Gross profit Margin percentage and Year Over Year trend on the Gross profit margin
Role:
Problem Statement
Beata’s profitability has generally remained low since the business inception and continues to decline with a GPM of 20% recorded in 2019.According to Houston Chronicles, traditional retail store are generally known for GPM of 45%. The industry continues to evolve as customer expectations increase coupled by rapid technological advancements and rise of omnichannel commerce. To remain competitive each retailer has to consider the profitability of their business model and products using analytics. This insight create a better approach to evaluate the profitability of Beata’s business model and products from 2016 to 2019.
Executive Summary
Data Dictionary
Key Takeaways
Next Steps
1. Cut costs : Source for cheaper prices from suppliers without compromising on quality. Carry out a market Cost analysis over the discounts being given and see if there is any benefit being derived from the additional cost.
2. Increase online sales: Focus on closing loss making branches and increase online sales in those geographic regions to increase sales.
3. Drop Products : Drop Products that are no longer selling or making losses.
4. Price Review: For the products being sold at a price less than the cost, review/increase the prices to reflect the increased cost / make a profit where possible.
Deployment
