Value of Profit Figuring. The value of the records described can scarcely be overestimated. To know the profit-making ability of each department and each salesman; to read at a glance the value of every town and every customer; to know the cost value of goods sold and the exact condition of the stock at the end of every month, these are the facts which enable a manager to size up his business.
Fig. 9. Departmental Comparative Trading Statement
The man who lacks these facts—who is obliged to wait for them until the end of the year, and then get only a part of them, does not have a grasp of his business, and cannot expect to bring it to the highest possible state of efficiency. That more managers have not insisted on having these facts before them is doubtless due to one or both of two causes: failure to appreciate their value; and the belief that dependable statistics of this sort were unobtainable without too great an expenditure of labor. Neither is borne out; all the evidence is to the contrary.
Fig. 10. Record of Purchases and Profits of a Customer
As to their value, little need be said. The fact that the most extensive enterprises find it profitable to compile statistics setting forth the most minute operations in every department is sufficient evidence of the value of corresponding statistics to the smaller merchant or manufacturer. If a great railway system finds it not only profitable but necessary to compile statistics showing the cost of repairs per ton-mile for every engine in its service, arranged for a comparison of the efficiency of individual locomotives, surely the merchant will find it profitable to analyze his profits. An analysis of the profits and losses of a wholesale grocer, showing how much he has made on tea; how much he has lost on sugar; what profit has been produced by a certain salesman; the profit value of a customer, is of as great value to him as a knowledge of the cost of repairs on an individual car to the officials of a railway.