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PROFIT IMPACT
Price has more profit leverage than volume or cost
Profit impact varies by EBIT margin:
1
A 1% price increase...
grows EBIT
by 4%
2
$101
$100
$20
$55
$25
$26
Revenue
Fixed Costs
Variable
Costs
EBIT
3
Improving each lever by 1% grows EBIT by:
Price
Variable
costs
Volume
Fixed
costs
4.0%
2.2%
1.8%
0.8%
"But what about lost volume?"
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