What is the profitability framework used to diagnose declining profit?
- A Profit equals revenue minus costs, decomposed into price, volume, fixed and variable costs
- B Profit equals assets minus liabilities
- C Profit equals market share times growth
- D Profit equals cash inflow minus outflow
Answer
Profit equals revenue minus costs, decomposed into price, volume, fixed and variable costs
Isolating whether the problem is price, volume or cost, and then which product or segment, directs the entire investigation.
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