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#1 Re: Help Me ! » How to calculate attribution of % variance knowing absolute values? » 2015-08-20 08:03:36
Now that you write about it this way, it starts making perfect sense 
Thanks again for your patience with me, Bob!
#2 Re: Help Me ! » How to calculate attribution of % variance knowing absolute values? » 2015-08-19 08:44:14
Hi Bob,
That simple at the end of the day?
Something nags me about the fact that 82% and 80% have been calculated with a different revenue number in the denominator. Had both percentages been calculated using the same "reference point" I would've concurred, but with different denominators? For some reason it seems we're unwittingly oversimplifying the calculation here...
#3 Re: Help Me ! » How to calculate attribution of % variance knowing absolute values? » 2015-08-18 09:10:40
Hi Bob,
Yep, sorry if the term "variance" was misleading. It's meant to mean simple arithmetical difference or "delta" between the numbers, not statistical variance.
As for my end result: I'm attempting to understand how much each of the reasons attributed to a 2% change in margin between two periods.
Perhaps, let me illustrate this point in terms of what I think is an incorrect approach, but that might give you a hint as to what I'm trying to achieve here:
Reason 1 contributes to the overall margin change: 5 / (90.2 - 80.0) * (82% - 80%) = 0.98%
Reason 2 contributes to the overall margin change: 2 / (90.2 - 80.0) * (82% - 80%) = 0.39%
Reason 3 contributes to the overall margin change: 3 / (90.2 - 80.0) * (82% - 80%) = 0.59%
Reason 4 contributes to the overall margin change: 0.2 / (90.2 - 80.0) * (82% - 80%) = 0.04%
The sum of all 4 adds up to 2% of the overall change in margin. But it can't be that simple, can it? For once, margin %'s are calculated using different revenue numbers for two periods in the denominators, so I'm reluctant to think that the calculation is that simple...
#4 Re: Help Me ! » How to calculate attribution of % variance knowing absolute values? » 2015-08-17 08:52:46
I just realized that my numbers in variances don't add up, really sorry for extra confusion that might've caused 
Here's a corrected and cleaned up layout of the problem:
Hopefully it all makes much more sense now. In essence, I'm trying to find out ??? numbers expressed as % changes in margin.
#5 Re: Help Me ! » How to calculate attribution of % variance knowing absolute values? » 2015-08-16 09:21:07
Hi Bob,
Sorry for delayed response: I was away for several days.
To your questions: the variances themselves, i.e. volume, mix, price, etc. are not important (or at least that's how I see it) - I could've easily named them x, y and z, etc. It's just that these are typical sources for variance in revenues and costs. My question is more broad and math-related, not economics':
Knowing items that comprise absolute variances for revenues and costs (whatever these items are!), how do I "translate" these items to the % variance in the margin?
In other words, if I know revenue for period 1 and absolute numbers that affect its change to the value in period 2 + the same for costs, how do I bridge costs / revenue ratios for two periods using those absolute variance items? Is there a way to tell that of the 2% variance (82% to 80%), e.g. x contributed, say, 0.4%; y contributed 0.5%, etc. such that the sum of those bridging items adds up to 2%?
Hope that clarifies what I'm trying to achieve here
Thanks again!
#6 Re: Help Me ! » How to calculate attribution of % variance knowing absolute values? » 2015-08-07 10:21:38
Hi Bob,
Let me explain this in a bit more detail. Basically I'm working on an economics problem where I'm calculating a margin % rate (margin / revenue) for two periods:
period 1 = 80 margin / 100 revenue = 80%
period 2 = 90.2 margin / 110 revenue = 82%
Now I know that in absolute terms the margin grew 10.2 from period 1 to period 2 due to: change in price of 4 and costs reduction of 6.2 (that's given).
Same goes for revenues - an increase from 100 to 110 is driven by: change in price of 5, volume of 2 and product mix of 3 (again, that's just given).
Now I need to know how each of above 5 factors (change in price on margin, cost reduction, change in price in revenues, change in sold volumes and product mix) have contributed to the 2% increase in the margin. I.e. how much of those 2% change between 2 periods is, say due to change in price in revenues, or due to a shift in volume, etc.?
Thanks again!
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