Most businesses strive for increases in their revenue.
Revenue Growth is great, but it should be done with the value in mind.
Ideally for a business the revenue growth rate will be greater than the growth in its Cost of Goods / Services Sold (COG/SS)
For this relationship to success the following is required:
- Prices should increase
- COG/SS should reduce
- Sales of products / services with higher profit margins are greater than those with less.
For this relationship to fail the following will happen:
- Prices reduce
- COG/SS will increase
- Sales of products / services with lower profit margins are greater than those with more.
Increase | Decrease | |
Price |
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COG/SS |
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Profitable Product Mix |
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If you would like to discuss further, please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandco.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com
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