www.quantumprofitmanagement.com Quantum Profit Management
Terms Relevant to Quantum Profit Management
CoGS Cost of Goods Sold - total materials or procurement costs of products and services delivered to customers
CTS Cost to Serve - total operating expenses, excluding pay for customer-facing sales reps
CTS Rate - the percentage of Revenue that CTS represents (CTS ÷ Rev)
change in PBIT - change in NBT or PBIT profitability when comparing two periods
GP Gross Profit - dollar amount of raw profits when CoGS is deducted from Revenue (Rev - CoGS)
Gross Margin - the percentage of Revenue that GP represents (GP ÷ Rev)
KPI Key Performance Indicator - quantifiable measurements that reflect critical success factors
LIPA Line-Item Profit Analytics - analysis producing profit numbers to the invoice-line level
NBC Net Before (Sales) Compensation - the profit generated after deducting operating expenses but not sales compensation costs — profit that is split between the sales force and the company (GP - CTS)
NBC% NBC Rate - the percentage of Revenue that NBC represents (NBC ÷ Rev)
Net Profit Before Taxes - "bottom line" profit on a standard P & L
(GP - CTS - Sales Comp)
P & L Profit and Loss statement - financial report showing profit or loss from operations for a given period (also called Income Statement)
PBIT Profit Before Interest & Taxes - Net profit exclusive of interest expenses
PIP Peak Internal Profit - total of all realized positive profits — the peak of the profit "whale curve"
QPM Quantum Profit Management - set of philosophies & principles employing LIPA to prioritize and grow profit generation
a top-down method of costing business operations down to the line-level - a requirement for LIPA — opposite of activity-based costing
Rev Revenue - amount net of returns and allowances billed to customers for products and services
ROTA Return on Total Assets - financial statistic showing how well investments are utilized
TPC Total Procurement Cost - complete or "real" cost of a product or service when timing, service, convenience and other value-adds are considered
graphic illustration of a profit ranking list — shows the peak profit generated by all of the profitable elements