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Module Four Assignment
Southern New Hampshire University
BUS 225: Critical Business Skills for Success
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Module Four Assignment
Explanation of the Importance of Data Analysis
Data analysis is important because it helps us understand problems within an organization. It allows us to explore, understand and tell a story using data. Once analyzed data can be used by decision-makers to make informed decisions concerning the company. Using quantitative data can help you track whether or not specific goals have been met during a product launch. Qualitative data can be used to see if the product was well received by the consumer and to gather customer feedback. In this study, we will be reporting on the relationship between COGS and profit to determine if the product is meeting expectations. It is important to analyze this information in order to understand whether the product is meeting the set profit goal of 25% of COGS, why or why not and what is working or what needs to change (Soomo).
Description of Findings
Overall, this product was not successful. There were six months over the course of the year where the company met its profit goal and six months where it did not. The percent profit overall for the whole year was only 4.18% (much less than the goal of 25%) therefore the in months where the company did earn a profit- the margin was not high enough to compensate for the months where COGS exceeded revenue. The information on the spreadsheet that was analyzed to determine this included annual percent profit, COGS, total revenue, profit, overhead and profit goal.
Beginning in May, overhead began to decrease. This decrease was a result of decreasing labol costs. The decrease in overhead/labor leads to a decrease in COGS. A decrease in COGs contributes to higher profit margin. In some months more units were sold. This leads to seeing revenue increased- which also leads to a higher profit margin. The number of units produced remained constant throughout the year despite a surplus of units. Over the course of the entire year, a total of 1,200,000 units were produced, but only 980,000 were sold creating a surplus of inventory of 220,000 units. The unit price remained the same throughout the year. The cost of materials remained the same throughout the year as well.
Summary of Results
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515.000.00 $10,000.00 $5,000.00 $0.00 $5,000.00 -510.000.00 -$ 15,000.00 -$20.000.00 $25.000.00
Profit & Profit Goal
The chart depicted here is a line chart. It portrays the information used to determine whether
or not the company met its profitability goal each month by illustrating the factors used to determine this including Profit and Profit goal. Each of these items changes each month. It is easy to see that the red line representing profit must be at or above the green line representing profit goal for the company to have met or exceeded its profit goal of 25%.
140,000.00 120,00.00 100,000.00 80,000.00 0,000.00 40,000.00 20,000.00 0.00 20,000.00 -40,000.00
Profit Units Sold Revenuc
The above