Archive of Journal - Financing

Financing – scientific journal for economy

ISSUE 2017, No. 2, Article 3, Year of publication: 8, June, 2017
Customer Profit Analysis – Assumption of Managing the Total Business Outcome


Predrag Gajić, PhD*

*PhD Assistant Professor, University of Banja Luka, The Faculty of Economics, Department for Accounting and Business Finance



The issue of profitability is a question of making sense out of a business activity in general. Defining different levels of profitability objects and determining the profitability amount of those levels ensures different informational basis for managing total operational income. The approach to profitability analysis is related to the amount and the allocation method of non-production and common costs, while calculation problems related to the revenue analysis arise only if two or more products are sold as a package, so the joint revenue has to be allocated. The selection of the distribution channel and the selection of individual customers within the selected distribution channel influence the amount of operating income and the total profitability of the enterprise. Besides, customer profitability analysis has to be supported with non-financial measures which should provide prospective on the cooperation with individual customer. The importance of individual decisions that have to be supported by the profitability analysis of distribution channels and individual customers within those channels will characterize this concept as a concept of an integral accounting support. Nevertheless, the whole concept has its limits of usability. That limit is defined by the minimum profitability rate calculated for the enterprise level.

Keywords: profitability, distribution channel profitability analysis, customer profitability analysis, customer account profitability, cost allocation, activity based costing.

DOI: 10.7251/FIN1702024G

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