Gross Margin Bridge Analyzer
Analyze margin variance with Price-Volume-Cost (PVM) waterfall bridge. Enter values for instant results with step-by-step formulas.
Worked Examples
Example 1: Price Hike Impact
Problem:Raised price by $10, volume dropped 5%.
Solution:Price Effect is positive. Volume Effect is negative.
Result:Net Margin increased if Price gain > Volume loss.
Frequently Asked Questions
What is a Bridge?
A financial analysis that 'bridges' the gap between two numbers (e.g., Budget vs Actual) by explaining the drivers of the difference.
What is the difference between markup and margin?
Markup is the percentage added to cost to get the selling price: Markup = (Price - Cost) / Cost. Margin is the percentage of the selling price that is profit: Margin = (Price - Cost) / Price. A 50% markup on a 10 dollar item sets the price at 15 dollars, but the margin is 33.3%. Margin is always lower than markup for the same product.
What is contribution margin and how is it used?
Contribution margin is revenue minus variable costs, showing how much each unit contributes to covering fixed costs and profit. CM Ratio = (Revenue - Variable Costs) / Revenue. Use it for break-even analysis, pricing decisions, and product mix optimization. Products with higher contribution margins should generally receive more resources.