Create a pivot table to answer questions like “Which region was the most profitable in 2018, as measured by the gross profit or its percentage?

Introduction to Financial Accounting

Cabinet Accessory Company: Sales, Cost, and Gross Profit Analysis[*]

Learning objectives

1. Find and correct errors in a data set (clean the data)
2. Add columns containing formulas to a data set
3. Create a pivot table in Excel
4. Create a pivot chart in Excel.
5. Analyze sales data using a pivot table and a pivot chart.
6. Determine the net impact on retained earnings using data from a pivot table.
7. Create a calculated field in a pivot table.
8. Sort a pivot table by stated criteria
9. Filter a pivot table
10. Interpret findings from a pivot table

Data set background

This dataset represents sales and cost data for a fictitious company, Cabinet Accessory Company (CAC), covering the four-year period from 2015 to 2018. CAC sells cabinet hardware including knobs and pulls. In the project, the student is asked to calculate the net impact on retained earnings each year from the sales and cost data. The project also focuses on the calculation of gross profit from a set of sales data and how that sales and cost data can be viewed from the perspective of the region, product line, etc.

Data dictionary

• customer number: Description
• region: There are eight regions: Central, East coast, Midwest, Northeast, Northwest, South, West, and International.
• date_of_sale: Description
• item: Description
• brand: There are three brands: Elements, Jeffrey Alexander and Riders
• collection: Description (there are several collections, all have sold more than 1 unit)
• description: Description
• list_price: Description
• cost: Description
• quantity_sold: Description

Prior to the analytics quiz date, all students will have access to:

• this document with instructions
• the video tutorial
• the video tutorial sample dataset
• the video tutorial slides and script
• the dataset for a mock quiz and the mock quiz

The complete dataset will be released on Sunday March 19th at 10am, and analytic quiz will start at 11am and closes at 11:30am. Students will answer a eClass quiz with 6 questions each pertaining to variations of requirements 2 to 6:

Requirement 1 – Create three columns in the Data worksheet that calculate sales revenue, cost, and gross profit for each sales record (each row.) Use the columns already named in the Data worksheet “sales revenue,” “total cost,” and “gross profit,” respectively. Format numbers in the three columns as Accounting with two decimal places.

Requirement 2: Create a pivot table that shows sales revenue by region for each of the four years and quarters. Correct any errors in the original dataset in the worksheet that are revealed in this initial pivot table. Once you have corrected the errors in the original data set, refresh the pivot table to reflect the corrected data. Insert a pivot chart that shows the sales revenue trend by region over the four-year period. In the pivot chart, the x-axis should be years and the y-axis should be sales revenue. What trends do you see in the pivot table and pivot chart?

Requirement 3 – Create a pivot table that shows sales revenue, total cost, and gross profit for each year. What would have been the net impact on retained earnings in each of these years from the transactions listed in the data set? Ignore any tax effects.

Requirement 4 – Create a pivot table to answer questions like “What was the most profitable brand in each year, as measured by gross profit?” Link in the same pivot table gross profit percentage and sales revenue; you will need to add a calculated field to the pivot table to calculate the gross profit percentage.

Requirement 5 – Create a pivot table to answer questions like: “Within each brand, what was the most profitable collection in 2018, as measured by the gross profit percentage? The least most profitable collection for each brand?” Use the field “years” to filter the data to include just the year of 2018. You will need to use the calculated field added in requirement 4 to calculate the gross profit percentage. Within each brand, sort the collections by gross profit percentage, from the largest to the smallest. Interpret your findings.

Requirement 6 – Create a pivot table to answer questions like “Which region was the most profitable in 2018, as measured by the gross profit or its percentage?” Include gross profit (dollars) in the pivot table. Use a filter to include only sales from 2018 in this pivot table. Sort the regions by gross profit dollar or percentage, from largest to smallest.

All sections: Answer the online quiz in eClass (6 marks in total, 1 mark each question)

* Case/Exercise developed by Wendy Tietz, professor of accounting at Kent State University in Kent, Ohio, USA. More exercises and tutorials are available at https://accountingintheheadlines.com/category/data-analytics/