Measuring Profitability Through Square-Inch Analysis: An Updated Approach

Calculating the square-inch profitability of an item is straightforward. Follow the steps provided below.
1. Item
2. Amount of page space for the item (1⁄4-page, 1⁄8-page, etc.)
3. Cost of the catalog page (printing, postage, creative and list cost of the catalog divided by the number of pages)
4. Cost of catalog space devoted to the item
5. Sales
6. Margin percentage
7. Margin
8. Catalog cost
9. Profit or amount available for fixed and overhead costs after subtracting catalog cost and cost of goods sold
10. Profit percentage (profit divided by sales).