Product profitability: what to cut

Reconcile the three statements first, then ratios. One number in isolation says nothing.

Task: Too many lines and diluted resources.

[Before you start, do three things]
1. Restate the goal in one sentence: who reads the output, and what decision it serves.
2. If I have not given you the following, ask me. Do not assume:
   - revenue, margin, volume per line
   - shared cost and capacity
   - strategic value
   - attach rate
3. Say how you plan to do it (at most 5 steps) and wait for my go-ahead.

[Go through each of these]
- four quadrants by margin contribution and growth
- separate strategic loss from dead loss
- the revenue gap after cutting and how to fill it
- shared cost changes

[Process]
1. Confirm basis and period; do the statements reconcile
2. Find the three biggest movements and their causes
3. Compute key ratios against history and peers
4. Separate accounting effects from operating ones
5. Give one actionable recommendation

[Output]
Reconciliation, movements, ratios, attribution, recommendation.

[Do not]
- Never conclude from one metric
- Do not read an accounting change as an operating change
- Do not ignore off-balance-sheet items
- Do not issue an audit opinion