Distributor Pl Roi Presentation Template


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Distributor ROI

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Distributor Pl Roi Presentation Template

  1. 1. DISTRIBUTOR P&L & ROI Input Distributor Name here…
  2. 2. Why are we doing the P&L and ROI analysis? <ul><li>As a business partner, we would like to understand the elements/factors affecting distributor’s profitability </li></ul><ul><li>For analysis and action planning, aimed at improving distributor’s business </li></ul><ul><li>Understand and agree on the role of both supplier and (distributor) in ensuring and maintaining viable business. </li></ul>
  3. 3. Distributor’s Profitability Who is accountable? <ul><li>Both (Distributor) and Supplier are responsible </li></ul><ul><ul><li>Long-term partnership </li></ul></ul><ul><ul><li>Fact-based basis for agreeing on investments in the business </li></ul></ul><ul><ul><li>Supplier able to direct focus and efforts of (Distributor’s) organization </li></ul></ul><ul><ul><li>(Distributor) ultimately responsible for profitability of its business, but Supplier has a supportive/guiding role </li></ul></ul>
  4. 4. Roles <ul><li>Support Distributor’s profit objectives </li></ul><ul><li>Collaborate with Distributor in development of best deployment, organization and operations </li></ul><ul><li>If needed, drive the process </li></ul><ul><li>Regular review of performance (put structure) </li></ul><ul><li>Candid and fact-based </li></ul><ul><li>Trust! 2-Way </li></ul><ul><li>Share P&L data (e.g., cost structures, salaries, DSO, etc.) </li></ul><ul><li>Open-mind in reviewing together with Supplier how to better manage resources/expenses to drive business </li></ul><ul><li>No surprises </li></ul>Supplier Distributor
  5. 5. Basic tools that we will use.. <ul><li>Profit & Loss Statement (P&L) </li></ul><ul><li>Return on Investment (ROI) </li></ul>
  6. 6. Profit & Loss Statement <ul><li>Definition: </li></ul><ul><li>A Profit and Loss Statement (P&L) is a standard financial document that summarizes a company's revenue and expenses for a specific period of time, usually one quarter of a fiscal year and the entire fiscal year. </li></ul><ul><li>Distributor P&L: </li></ul><ul><li>Provides level/percent of profit Distributor gets from a specific partnership with a Principal/Company. </li></ul>
  7. 7. Return on Investment (ROI) <ul><li>Definition: </li></ul><ul><li>ROI measures how effectively the company uses its capital to generate profit ; the higher the ROI, the better. </li></ul><ul><li>This is one of the most important profitability metrics. ROI shows how much profit a company earned in comparison to the total amount of capital the owners invested in the company. </li></ul><ul><li>A Distributor that has a high return on investment is more likely to be one that is capable of generating cash internally. </li></ul>
  8. 8. Benefits to Distributors <ul><li>P&L and ROI analysis can deliver significant efficiencies and productivity </li></ul><ul><ul><li>When looking for improvements: focus on big ticket items, e.g., vehicles, salaries, allocation of fixed costs, inventory levels </li></ul></ul><ul><ul><li>We need to Just do it! </li></ul></ul><ul><li>Joint effort of Supplier and Distributor to improve resource use and improve business </li></ul><ul><li>Reinforces and strengthens business relationship between Supplier and Distributor </li></ul>
  9. 9. What it is NOT… <ul><li>An exercise or tool to change/reduce distributor discounts </li></ul><ul><li>An excuse to change any of the contractual agreements between the distributor and Supplier </li></ul><ul><ul><li>Operational set-up </li></ul></ul><ul><ul><li>Coverage area </li></ul></ul><ul><ul><li>Deployment, etc. </li></ul></ul><ul><li>A replacement to the official P&L Statement being used for government reporting and tax purposes </li></ul>
  10. 10. P&L/ROI Tool
  11. 11. P&L and ROI <ul><li>Present the resulting P&L and ROI of the distributor using the template </li></ul>
  12. 12. Key Opportunity Areas <ul><li>Opportunity 1 </li></ul><ul><li>Opportunity 2 </li></ul>
  13. 13. Action Plans & Timing
  14. 14. Next Steps Next Steps Resp Timing