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Profitability Analysis

What is Profitability Analysis in SAP



Profitability Analysis (CO-PA) enables to evaluate market segments, which can be classified according to products, customers, orders or any combination of these, or strategic business units, such as sales organizations or business areas, with respect to company's profit or contribution margin.

The aim of the system is to provide sales, marketing, product management and corporate planning departments with information to support internal accounting and decision‑making.

Two forms of Profitability Analysis are supported: costing-based and account-based.

<b>Costing-based Profitability Analysis</b> is the form of profitability analysis that groups costs and revenues according to value fields and costing-based valuation approaches, both of which one can define oneself. It guarantees access at all times to a complete, short-term profitability report.

<b>Account-based Profitability Analysis</b> is a form of profitability analysis organized in accounts and using an account-based valuation approach. The distinguishing characteristic of this form is its use of cost and revenue elements. It provides with a profitability report that is permanently reconciled with financial accounting.

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Sanil Bhandari

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