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Revenue Growth and Cost of Goods / Services Growth


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

         

         

      

         

COG/SS

      

         

       

       

Profitable Product Mix

      

         

      

       



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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