Lesson Summary

When designing Key Performance Indicators (KPIs) for GutBuddy Yogurt, the focus is primarily on understanding and driving business growth through revenue and cost management.

Key revenue KPIs include:

• Revenue Growth Year Over Year: This KPI measures the overall increase in revenue compared to the previous year, providing insight into the business's growth trajectory.
• Same Store Sales Year Over Year: This metric isolates performance by focusing on sales from stores that have been open for at least one year. It excludes new store openings to better gauge the impact of promotions and marketing efforts on existing locations.

Important cost KPIs to consider are:

• Gross Margin: This is a crucial KPI closely watched by investors, bankers, and stakeholders. It indicates the profitability of sales before accounting for operating expenses (OPEX). It is calculated by dividing the gross profit (revenue minus cost of goods sold) by the total revenue.
• Gross Margin per SKU (Stock Keeping Unit): Each product flavor or type has a unique SKU number. Examining gross margin per SKU helps identify the profitability of individual products, enabling more detailed financial analysis and better decision-making regarding product offerings.