Measures the profitability of individual product lines within a company.
What it Measures ?
Which product lines make us more money.
Relevant StakeHolders
Product Manager, Sales Head
Why it Matters ?
Tracks profitability at the product line level.
In-depth Use Case / Real-world Example
Profitability by Product Line evaluates the profit margins generated by each product or product category. For example, if a company has ₹1,000,000 in sales from product A and ₹800,000 in costs, the profitability would be ₹200,000. Analyzing profitability by product line helps identify high-performing products and allocate resources efficiently.
Sample Formula
(Revenue - Direct Costs) / Total Revenue by Product