Brierley, J.A. (2016) An examination of the use of profitability analysis in manufacturing industry. International Journal of Accounting, Auditing and Performance Evaluation, 12 (1). pp. 85-102. ISSN 1740-8016
Abstract
Although profitability analysis has been identified as a useful technique, it is an under-researched area. This paper extends the limited research into profitability analysis by using research interviews to examine the circumstances when profitability analysis is or is not prepared, why various types of profitability analysis are prepared and the how it is used in decision making. Some notable results indicate that operating units prepare profitability analysis when there is an interest in preparing it and the resources exist to prepare it. Operating units prepare both product profitability analysis (PPA) and customer profitability analysis (CPA) to assist with increasing profits through managing low profit or loss making customers. The aim is to identify those products that contribute to the low profit or loss of a customer. In those operating units preparing only PPA, its function is to identify low profit or unprofitable products. This information is used to assist in determining what action should be take to increase the profits of those products. In contrast, customer focused operating units produce only CPA.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2016 Inderscience. This is an author-produced version of a paper subsequently published in International Journal of Accounting, Auditing and Performance Evaluation. Uploaded in accordance with the publisher's self-archiving policy |
Keywords: | product profitability analysis; PPA; customer profitability analysis; CPA; attention directing information; manufacturing industry; decision making; low profits; loss making |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 19 Mar 2015 12:47 |
Last Modified: | 11 Jul 2016 01:06 |
Published Version: | http://dx.doi.org/10.1504/IJAAPE.2016.073896 |
Status: | Published |
Publisher: | Inderscience |
Refereed: | Yes |
Identification Number: | 10.1504/IJAAPE.2016.073896 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:83953 |