Profit Performance Assessment Tool
Acquire an Understanding of the Business
- review overall business goals and objectives
- perform interviews with key employees
- senior leadership team
- marketing/sales
- manufacturing/purchasing
- finance
- examine all product lines, subsidiaries, partnerships, etc.
- identify critical markets, competition and customers
- review individual business goals and related strategies
- review relevant financial and business information
Perform Analytical Review of Business
- enhance and create key metrics and trends
- includes both financial and operational information
- focus in on critical performance data to identify areas of concern

- metrics must be simple and sustainable
- perform product-line profitability analysis
- determine each product line’s true contribution to the business
- ensure proper overhead allocation
- ensure overlapping products do not mask performance issues
- dissect income statements, margin rates, key metrics and trends
- identify root causes of poor performance
- verify and test findings via discussions and confirmations
- major objective is to determine areas of the business not meeting expectations and to learn “why”
Report on Major Issues Affecting Profitability of the Business
- create Profit Performance Assessment Report which includes:
- detail description of assessment process including the methodology utilized and interviews conducted
- thorough identification and explanation of issues contributing to poor profit performance. Such issues could relate to:
- business or product-line strategy
- sales trends and growth strategy
- pricing policy and trends
- product/project cost
- overhead cost levels

- business process concerns
- recommendations for corrective actions
- detailed corrective action plan for each of the issues identified
- explanation of how these actions will improve performance
- corrective actions could include the following:
- business strategy adjustments
- pricing policy changes
- internal business process changes
- cost reduction guidelines
- modified sales and marketing focus
- enhanced performance objectives and monitoring
- creation of sustainable follow-up procedures to ensure success of corrective actions.