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But 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
by kgermino 9y ago
But 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.