Cigar Box method: Difference between revisions

Revision as of 16:02, 22 July 2020

Revision as of 09:42, 12 February 2021

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*T = Tax (as % of profit).

More specifically, in (food) processing business, there are three types of [[variable cost]]: VC1 = Raw Materials and Ingredients, VC2 = costs of processing inputs into outputs, VC3 = costs of packaging materials, VC4 = cost of delivery. The [[fixed cost]] (FC) are also divided into three types: FC1 = depreciation of fixed assets, FC2 = interests paid, FC3 = overheads (salaries, transport, maintenance, marketing, ...), FC4 = cost of marketing and advertising. Using these 5 parameters in simple formulas, a trained person can do a Cigar Box Profit analysis in half an hour. When data are missing assumptions can be made using educated guesses.

== Profit calculation methods ==

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* https://bakeryinitiatives.com/5p-profit-program/planning/bakery-feasibility-study/

[[Category: Agricultural economics]]