BTHE BARATELLI INSTITUTE · Mentoring at Scale
CFO DECISION SUPPORT

Which products actually
make you money?

Most mid-market owners have a vague sense that "some products make money, some don't." Few actually know which ones. Typical finding: 20% of SKUs lose money once fully loaded. Run the math on your top SKUs in five minutes.

YOUR ANALYSIS
1
Company overhead
2
Your SKUs
3
True profitability
STAGE 1 OF 3

Allocated overhead

For each SKU we'll calculate true contribution margin — meaning revenue less direct COGS less an honest share of operating overhead. The overhead-allocation rate is the lever owners get wrong most often. Pick a method.

SG&A, plant overhead, indirect labor, facilities, depreciation, owner comp, sales/marketing, G&A. Anything not directly variable with each SKU.
$
Why this matters. Most P&Ls show "gross margin" by SKU but never load operating overhead onto each product. The result: the team thinks every SKU with positive gross margin is profitable. Once overhead is allocated, the picture changes. The lowest-volume premium SKUs often look great on gross margin but lose money once their share of warehouse, customer service, and G&A lands. The highest-volume commodity SKUs sometimes look thin on gross margin but throw off real cash because they absorb overhead efficiently.
STAGE 2 OF 3

Enter your top SKUs

Add 5-15 of your top products by revenue. Doesn't have to be every SKU — the 80/20 of your business is enough to spot the pattern.

SKU / Product Name
Annual Units
Price per Unit
Direct Cost per Unit
STAGE 3 OF 3 · YOUR TRUE PROFITABILITY

Fully-loaded SKU profitability

Loading...
Calculating...
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SKU-by-SKU breakdown

SKU Revenue COGS Gross Margin Allocated OH True Profit True Margin %

What to do with this

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Allocated-overhead rates approximate the burden each SKU should carry under the chosen method. Actual full-cost accounting often requires activity-based costing for highest accuracy, particularly when SKUs differ meaningfully in complexity, channel, or service intensity. Use this tool as the directional baseline; engage a CPA or controller for transaction-grade product cost analysis.
WANT THE METHODOLOGY BEHIND THIS TOOL?
This calculator is one chapter of CFO & Controller's Reference Guide.
The tool gives you the answer. The guide gives you the argument — the case law, the worked examples, the negotiation playbook, the cross-check tables, the exception cases. Read the chapter and you can defend your number to a board, a buyer, an examiner, or a counterparty.
The methodology behind this calculator is in Ch 28 KPI Dashboards of the reference guide.
See the Guide → Browse all 22 guides
PROFESSIONAL DISCLAIMER · PLEASE READ

Educational and informational purposes only. This calculator and any output it produces are intended solely for general educational and decision-support purposes. They do not constitute investment, tax, legal, accounting, appraisal, lending, insurance, or any other professional advice, and they do not create a fiduciary, attorney-client, accountant-client, or advisor-client relationship of any kind.

Estimates based on your inputs. All results are estimates derived from the data and assumptions you provide. Tax law, accounting standards, regulations, market conditions, and the specific facts of your situation can materially change the answer. The Baratelli Institute, its affiliates, and any co-branding professional make no warranty of accuracy, completeness, currency, or fitness for any particular purpose, and disclaim all liability for decisions made in reliance on the output.

Consult your own qualified professionals. Before acting on anything calculated here, consult your own attorney, CPA, financial advisor, appraiser, lender, or other qualified professional licensed in your jurisdiction who has reviewed your specific facts and applicable current law. The Baratelli Institute is a publisher of practitioner reference material. It is not a registered investment adviser, broker-dealer, law firm, accounting firm, appraisal firm, or lender.

Co-branded versions: If a professional advisor's name and contact information appear on this tool, that advisor has elected to make the tool available to clients as a courtesy. Inclusion of an advisor's name does not constitute the advisor's endorsement of any specific result, nor does it transfer professional responsibility for the underlying methodology to that advisor. The disclaimer above applies regardless of co-branding.

Educational references and tools — not legal, tax, accounting, or investment advice, and not a recommendation to buy or sell any security. Consult a qualified professional about your specific situation. © 2026 The Baratelli Institute.