Margin Analysis - 2 Product Sets

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Finance

Compare profit margins between two product sets or business units. Calculate individual margins, identify most profitable option, and determine combined bundle margin for portfolio analysis.

Formula

Margin % = (Revenue - Cost) ÷ Revenue × 100%; Bundle = (Total Revenue - Total Cost) ÷ Total Revenue × 100%
  • Higher margin = better profitability per dollar
  • Bundle margin = weighted average of both sets

Product Line Comparison

Inputs
  • Set 1: Revenue ($): 100000 $
  • Set 1: Cost ($): 60000 $
  • Set 2: Revenue ($): 150000 $
  • Set 2: Cost ($): 105000 $

Set A: $100k rev, $60k cost = 40% margin. Set B: $150k rev, $105k cost = 30% margin. Set A is 10pts higher. Bundle: 34%.

Frequently asked questions

Which set should I focus on?
Higher margin % is better profit per sale. But volume matters too - 30% on $500k revenue > 40% on $100k revenue.