The profit planning is refers to process of developing that outlines the planned sales revenues and expenses and the net income or loss for a time period. Profit
planning requires preparation of a master budget and various analyses for risk
and what-if scenarios. Tools for profit planning include the cost - volume
- profit
(CVP) analysis and budgeting.
The actual process of profit planning involves looking at several key factors relevant to operational expenses. Putting
together effective profit
plans
or
budgets requires looking closely at such expenses as labor, raw materials,
facilities maintenance and upkeep, and the cost of sales
and marketing efforts.