Profitability Analysis

Building on our previous Case Study, we found that strong sales figures do not always indicate healthy sales. We enhanced the provided sales data with additional information on applied discounts to assess the quality of Revenue.

Sales Volume vs. Profit Margin: Display relationships between units sold, discounts, and total sales.

Higher margin discounts in the East and North East are disturbing, and volumes are insufficient.

The 46% - 48% and average discounts in the South East and North East were rather alarming.

The positive aspect is that product prices are structured to maintain a reasonably healthy margin for the industry (refer to the graph below).

To address the issue, executives reevaluated the Sales KPIs and restricted discounts for specific product categories.