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UNDERLYING SALE GROWTH

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by

Bill Crawford

on 27 September 2013

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Transcript of UNDERLYING SALE GROWTH

UNDERLYING SALE GROWTH
Agenda
- Understanding of Sales growth
What is sales growth.
Types of Sales growth
Formula of Sales growth

- Q & A

What is Sales Growth

Is the difference between actual sales and sales in previous comparable period.

Often but not necessarily annually.

It is used to measure the performance of a sales function or analyze business results to better understand market conditions.

Underlying Price Growth (UPG)
Reflects sales variance over the period in respect of change in unit price.
Represents the growth rate terms of unit price rather than Volume
Provides a realistic measure towards the performance of the organization’s sales function

Illustration based on top selling SKU - NL52NOBK1-18

Comparison UVG v/s Simple Calculation
Comparison UPG v/s Simple Calculation
Formula

Current Actual Sales Value – Previous Actual Sales Value

Underlying Volume Growth (UVG)
Reflects volumetric sales variance over the period.
Represents the growth rate in terms of volume rather than in terms of price.
Provides more realistic measure towards the performance of the organization’s sales function.

Formula
(Avg. Price current period – Avg. Price previous period) x Qty sold in units current period
Formula
(Avg. Price current period – Avg. Price previous period) x Qty sold in units current period
Simple Volume Growth Working Based On Actual Data of Two Groups

Growth based on UVG
Summary

59 %

76 %

2013
Qty sold = 625,860 DPs
Average Rate per DP = USD 11

2012
Qty Sold = 302,704 DPs
Average Rate per DP = USD 13

Underlying Volume Growth
{(625,860 – 302,704) x 13} USD 4,095,281
(i.e. 107%)

Underlying Price Growth
{(11 – 13) x 625,860} USD -735,488
(i.e. -19%)

Underlying Sale Growth
{(625,860 x 11) –(302,704 x 13)}
USD 3,359,793
(i.e. 88%)

Simple Calculation
76%
UVG
59%
Simple Price Growth Working Based On Actual Data of Two Groups
Growth based on UPG
Summary
Simple Calculation
-11%
UPG
-15%
Questions ?
THANK YOU
Full transcript