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Answer Posted / aris
Profitability Analysis (CO-PA) enables you 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 your company's profit or
contribution margin.
The aim of the system is to provide your 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.
Costing-based Profitability Analysis is the form of
profitability analysis that groups costs and revenues
according to value fields and costing-based valuation
approaches, both of which you can define yourself. It
guarantees you access at all times to a complete, short-
term profitability report.
Account-based Profitability Analysis 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 you with a profitability report that
is permanently reconciled with financial accounting.
You can also use both of these types of CO-PA
simultaneously.
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