Gross Margins Reports

The Gross Margins reports show the projected gross margin for each cattle, sheep, and goat enterprise during each of the next five years.

In Ranch Vision, Gross Margin = Gross Product - Direct Costs. Gross margin is calculated before overhead, interest, and depreciation.

Gross margin shows how much each enterprise is projected to contribute individually toward overall ranch profitability after its direct costs are deducted. This can challenge assumptions about which enterprises are actually contributing to profit: an enterprise expected to be profitable may be losing money, while another may be contributing more than expected.

Gross Margin can reveal results that may not be obvious from day-to-day operations. An enterprise assumed to be profitable may actually be losing money, while one assumed to be unprofitable may be performing more effectively than expected. Because each enterprise contributes to overall ranch profitability, changing the size or mix of enterprises can significantly affect the ranch's financial performance.

How to use it: Use Gross Margins to identify which enterprises are contributing to or detracting from overall ranch profitability. Before expanding a profitable enterprise or reducing an unprofitable one, use Ranch Vision's Cost-Benefit Analysis process to evaluate opportunities to improve the potential profitability of each grazing livestock enterprise. Then use Scenario Comparison to evaluate how changes to the enterprise mix could affect the ranch as a whole.