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Technically, unit price has gone up for sure. Profits also depend on costs, so it probably went up, but you can't say for sure just from this data.
by danmaz74 9y ago
Technically, unit price has gone up for sure. Profits also depend on costs, so it probably went up, but you can't say for sure just from this data.
- FireBeyond 9y agoTrue, but in the context of the parent post, "average sale price hasn't changed much", then if we assume the following: unit price remains stable, unit sales have increased 10%, unit revenue has increased 25%, then profit has absolutely increased (and as you say, only due to a decrease in costs).
- kgermino 9y agoBut revenue is not profit. If units are up 10% and revenue is up 25% then there must have been an increase in average selling price. That alone doesn’t tell us anything about whether profit went up or down.
- FireBeyond 9y agoAck. Yes. This is why my girlfriend is the one on track to become a CPA, not me!
- AceyMan 9y agoI believe you'd could get the same ratios when unit costs go down (e.g., raw materials costs drop, fixed costs such as tooling are amortized, and so forth).
- kgermino 9y agoNo, you could see those ratios with net income or profit but revenue is simply numUnitsSold*avgSellingPrice. It doesn’t take unit costs into account.