Strategic Profit Model


NEW – for students and educators!
 Download your own interactive Excel spreadsheet and create SPM's using your own data. Available on the On-Line Store page.

NEW – for tax exempt and nonprofits!  Do you believe that tax exempt and non profit organizations need to make a profit (revenue less expenses) to fund the mission?  If you do, download the interactive Excel spreadsheet and create SPM's using your own, or others, IRS form 990 data. Use the tool to better understand the organization's financial picture and communicate to others.  Available on the On-Line Store page.


ABOUT THE STRATEGIC PROFIT MODEL


The Strategic Profit Model (also know as the DuPont Model) gives a visual view of an organization's finances and provides the ability to understand and analyze financial performance and return on investment (ROI).

The tool provides visibility to the inter-relationship between the three major categories that contribute to ROI:  Margins, Asset Utilization and Capitalization through combinations of debt and equity.



An interactive Excel version of the Strategic Profit Model is available at http://shop.inventorycurve.com



Everything has an impact on ROI and the bottom line. ROI can be improved by:
  • Increasing the net profit through price management, expense control or process and productive improvements.
  • Increasing inventory and accounts receivable turnover.
  • Managing capitalization.

NEW!!!                  JUST RELEASED!!!

The Interactive Strategic Profit Model for Non-Profits is now available at shop.inventorycurve.com. It uses 990 reports as input and has views by major expense categories (Program Services, Management and General and Fundraising) and by expense line items.  

The Interactive Strategic Profit Model (SPM) spreadsheet tool is now available at shop.inventorycurve.com.  Enter in financial information from the Balance Sheet and Income Statement and the spreadsheet computes and presents two versions of the SPM for an organization.  Use coupon code ICSpring14 for a 20% discount off the already low price.

Have questions about the Strategic Profit Model?  Send me a note at David.Armstrong@inventorycurve.com


Commentary

I use the Strategic Profit Model to compare the financial performance of different companies in the same industry.  Insight can be gained into business models used and differences in strategy.  I've also used the model to compare operations of the same organization at different points in time.  For actual examples with REAL companies, see my LinkedIn profile posts.


When developing plans for major projects such as a new computer system, the Strategic Profit Model has been valuable to evaluate "what if" scenarios.

The Strategic Profit Model can be used as part of training programs to not only show the financial relationships, but how Functional areas and even specific jobs contribute to ROI.



An interactive Excel version of the Strategic Profit Model is available at http://shop.inventorycurve.com

Primary Source: Return on Investment to Wholesaler-Distributors, Richard E. Peterson, National Association of Wholesaler-Distributors, Washington, D.C., 1975.

If you have questions or would like to discuss how Strategic Profit Model can be used within your organization, please feel free to contact me at David.Armstrong@inventorycurve.com.

  ® Inventory Curve, LLC, Westminster, Colorado USA
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