Financial Report

This report provides you with revenues, costs and profit information at the company, market and brand levels.

The Profit & Loss statement of your company is illustrated in Figure 13 and is explained below.

      Revenues: Number of units sold x Average selling price. The selling price is equal to the retail price (your decision) minus the distributors’ margin.

      Cost of goods sold (COGS): Number of units sold x Unit transfer cost. The transfer cost is equal to the base cost of the underlying R&D project minus the productivity gains.

      Inventory costs: Inventory holding cost + Inventory disposal loss

      Inventory holding costs: Units in inventory x Unit transfer cost x Inventory holding cost in % (given in the market news report).

      Inventory disposal loss: Loss incurred when selling inventory to a trading company because of a product upgrade or brand withdrawal. Units in inventory x Unit transfer cost x Inventory disposal cost in % (given in the market news report).

      Contribution before marketing (CBM): Revenues – COGS – inventory costs.

      Contribution after marketing (CAM): CBM – advertising media – advertising research – commercial team costs (your decisions).

      Market research studies: costs of the market studies purchased during the period (your decision).

      Research & Development: budgets allocated to R&D projects during the period (your decision).

      Interests paid: Interest paid on loans granted in previous periods.

      Exceptional cost or profit (ECP): Exceptional items such as brand withdrawal costs.

      Net earnings: CAM – market research studies – R&D – interests paid – ECP.

Figure 13 –Financial Report – P&L statement

The Market and Brand Contribution reports are similar to the company profit & loss statement. They provide financial elements for each marketed brand as well as the consolidation of all brands by market. A sample brand contribution chart is shown on Figure 14

Figure 14 – Financial Report – Brand contribution