1. The document discusses sales and cost analysis techniques used to measure performance, identify problems, and uncover sales opportunities. 2. It describes how to manage sales control through setting goals, comparing actual performance to targets, and taking corrective action. Common problems include external factors and inadequate information. 3. Various types of sales analysis are outlined, including analysis by region, sales representative, product, customer, and distribution channel to convert raw data into actionable insights.

1. Sales & Cost Analysis
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2. Sales & Cost Analysis
Done for sales control: statistical purpose of sales
control: A/cg analysis to determine profitability
Why Sales Control?
1. Measuring Performance: Objective evaluation of
sales efforts critical for growth
Some measures: Sales / Quota ratio / Budget
ratio, Closes / Calls ratio
2. Identifying problems before they magnify:
Inaccurate sales forecasts, low profit margins,
low business, inability of Sales Management to
maximize revenues to existing customers
3. Identifying sales opportunities
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3. How to manage Sales Control?
1. Setting goals: Part of Sales Planning & Sales
Budgeting process
SP: Staffing, Recruiting, Training, Evaluation
SB: Targets for Sales and for Costs associated
with Sales
2. Comparing actual with targets
3. Taking corrective action
Problem in sales control
1. External factors over which sales people have no
control
2. Inadequate information
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4. Sales Analysis
1. Gathering, classifying, comparing and studying
sales data
2. Converts row data from various sources into
actionable information
3. Helps in non marketing functions like production
planning, cash management, inventory
management etc.
4. Managers have to decide on purpose of
evaluation before doing sales analysis; simple
sales analysis gives figures while comparative
sales analysis sets standards
5. Sales information systems use mathematical and
statistical procedures to generate reports;
managers have to decide which information to
use for what purpose.
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5. How to do Sales Analysis?
1. Most critical element in sales analysis is sales
information; most commonly used source for
sales information is the sales invoice.
2. Other sources of information include cash
register receipts, sales person call reports and
expense reports, financial reports, warranties etc.
3. Different types of sales analysis could be :
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6. 1. Sales Analysis by Region
Region S. Quota Actuals Diff. Performan
ce Index
Sales/SQ ×
100
West 10.25 10.20 -0.05 99.51
South 10.00 10.02 +0.02 100.20
North 9.75 9.73 -0.02 99.79
East 8.75 7.01 -1.74 80.11
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7. 2. Sales Analysis by Sales Representative
Sales Rep. S. Quota Sales Diff. Perf. Index
Ravi 500.5 475.5 -25 95.00
Rahul 300.5 290.5 -10 96.67
Rishi 500.25 150.25 -350 30.03
Raj 425.75 400.75 -25 94.12
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8. 3. Sales Analysis by Product for Rishi
Product Quota (Rs.) Actual (Rs.) Diff.
Tooth Paste 400 240 160
Soap 300 180 120
Cosmetics 500 220 280
Rishi has problems of motivation, selling skills.
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9. 4. Sales analysis by customer: Company can focus
on promising segments
5. Sales analysis by distribution channel: Can help
in making elimination decisions regarding
channels
6. Sales analysis by units sold: Useful during times
of inflation and price changes
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10. Sales Audit
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11. Sales Audit
 Periodic Review of Sales Activity
 Earlier Financial Review, but now done for HR,
Marketing etc.
 A Sales Force Management Audit involves
 Study of sales management environment
(customers, economic, competitive, tech.
legal etc.)
 Study of sales department’s objectives,
strategies, implementation.
 Evaluation of the sales organization to its
effectiveness
 Evaluation of SM functions: recruitment,
compensation, forecasting, training,
budgeting
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12. Sales Analysis focuses on Results
Cost Analysis looks into costs incurred to
produce results.
Profitability Analysis would include Sales
Cost and Marketing Costs.
Marketing Cost Analysis analyses sales
volume and selling expenses to identify the
profitability of sales activities.
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13. Break Even Analysis
(Unit SP × No. of Units) – (Unit Var Cost × No.
of Units)
Less fixed costs = Operating Income = 0
Eq. SP = Rs.30, CP = Rs.21, Fixed Cost =
Rs.36,000
(30 – 21) × N – 360000 = 0
or, N = 360000 / 9 = 40,000 (Break Even Point)
Eq. Co. wants operating profit of 1,35,000
(30 – 21) × N – 360000 = 135000
So N = (360000 + 135000) / 9 = 55000
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14. Return on Assets Management
Sales
Contribution Margin / Net Profit ×
Sales Assets Management
ICEBERG Principle
Aggregating total sales figures & comparing
with past data, wide peals & troughs of
performance & causes problems. So analyze in
detail.
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