Profitability
Margin analysis and financial health scoring
Overview
The Profitability dashboard (also called P&L or Financial Health) provides a comprehensive view of your organization's financial performance. It answers the fundamental question: "Are we making money?"
This dashboard combines traditional profit and loss analysis with a proprietary health score that synthesizes multiple performance indicators.
The Health Score
What It Is
The Health Score is a single number (0-100) that represents your overall financial health. It combines multiple factors into one easy-to-understand metric.
| Score Range | Grade | Meaning |
|---|---|---|
| 80-100 | A | Excellent — strong financial position |
| 70-79 | B | Good — healthy with minor areas for improvement |
| 60-69 | C | Fair — some concerning trends |
| 50-59 | D | Poor — significant issues need attention |
| Below 50 | F | Critical — immediate action required |
What Affects the Score
The health score considers:
- Gross margin — Are you pricing appropriately?
- Revenue trend — Is the business growing?
- Expense control — Are operating costs reasonable?
- Cash flow — Is cash position healthy?
- Margin consistency — Are margins stable or volatile?
Key Metrics
Header Metrics
| Metric | Description |
|---|---|
| Health Score | Overall financial health (0-100) |
| Revenue YTD | Total revenue for current fiscal year |
| Gross Margin | Revenue minus cost of goods sold |
| Gross Margin % | Gross margin as percentage of revenue |
| Operating Expenses | Total OpEx for the period |
| Net Operating Income | Revenue - COGS - OpEx |
Trend Indicators
| Metric | Description |
|---|---|
| Revenue vs. Prior Year | Year-over-year revenue change |
| Current Month Revenue | This month's revenue |
| Run Rate | Projected annual revenue based on current pace |
| Margin Trend | Direction of gross margin over time |
Dashboard Sections
Margin Waterfall
The waterfall chart shows how revenue flows to profit:
- Revenue — Starting point
- COGS — Cost of goods sold (subtracted)
- Gross Profit — Revenue minus COGS
- Operating Expenses — Broken down by category
- Net Operating Income — Bottom line
Click any bar to drill into the details.
Department Performance
If you track by department, see:
- Revenue by department
- Gross margin by department
- Contribution to overall profit
- Department-level health scores
This helps identify which parts of your business are most profitable.
Revenue Analysis
- Top Revenue Movers — Customers driving growth or decline
- Revenue Concentration — How dependent are you on key customers?
- Revenue by Category — Product/service mix analysis
Anomaly Detection
Gantry automatically identifies unusual patterns:
- Sudden margin changes
- Unexpected expense spikes
- Revenue drops
- Unusual transaction patterns
Anomalies are flagged with color-coded severity.
How Metrics Are Calculated
Gross Margin
Gross Margin = Revenue - Cost of Goods Sold
Gross Margin % = (Revenue - COGS) / Revenue × 100
COGS includes:
- Direct materials
- Direct labor
- Manufacturing overhead
- Subcontractor costs
- Other costs directly tied to revenue
Operating Expense Ratio
OpEx Ratio = Operating Expenses / Revenue × 100
A lower ratio indicates better expense control.
Health Score Components
The health score uses weighted factors:
| Factor | Weight | Optimal Range |
|---|---|---|
| Gross Margin | 30% | 25-50% depending on industry |
| Revenue Growth | 20% | Positive YoY growth |
| OpEx Ratio | 20% | Under 30% of revenue |
| Cash Position | 15% | Positive runway |
| Margin Stability | 15% | Low variance |
Your configuration can adjust these targets to match your industry.
Using the Dashboard
Monthly Review
- Check overall health score trend
- Review gross margin against target
- Identify top revenue movers
- Investigate any flagged anomalies
- Compare departments if applicable
Quarterly Analysis
- Compare to same quarter last year
- Analyze margin trends
- Review expense categories
- Assess department performance
- Adjust targets if needed
Annual Planning
- Review full-year health score progression
- Set margin targets for next year
- Identify departments needing improvement
- Plan expense optimization initiatives
Configuration Options
Access via Settings → Profitability:
Margin Thresholds
| Setting | Purpose | Default |
|---|---|---|
| Target Gross Margin | Your goal margin | 20% |
| Warning Threshold | Yellow alert level | 15% |
| Critical Threshold | Red alert level | 10% |
| Margin Upper Bound | For display scaling | 60% |
| Margin Lower Bound | For display scaling | 5% |
Expense Settings
| Setting | Purpose | Default |
|---|---|---|
| OpEx-to-Revenue Warning | Alert when OpEx ratio exceeds | 30% |
| Revenue Decline Alert | Alert on YoY decline of | 10% |
Department Settings
| Setting | Purpose |
|---|---|
| Hidden Departments | Exclude from analysis |
| Department Targets | Set margin targets per department |
Understanding Anomalies
Gantry flags these types of anomalies:
Margin Anomalies
- Sudden drops in gross margin
- Margin outside normal range
- Margin significantly different from same period last year
Revenue Anomalies
- Unexpected revenue spikes or drops
- Revenue concentration risks (too dependent on one customer)
- Unusual seasonality patterns
Expense Anomalies
- Expense categories growing faster than revenue
- Unusual one-time expenses
- Expense timing anomalies
Each anomaly shows:
- What was detected
- Magnitude of the anomaly
- Suggested investigation steps
Best Practices
Set Realistic Targets
Use industry benchmarks appropriate for your business. A 40% margin target for a service business might be aggressive; for software, it might be low.
Track Trends, Not Just Numbers
A 22% margin is less important than knowing if margins are improving or declining.
Investigate Anomalies Promptly
Anomalies are early warning signals. Investigate before small issues become big problems.
Compare Apples to Apples
When comparing periods, account for seasonality and one-time events.
Align Across Organization
Share the health score with leadership. A single number creates common understanding.
Common Questions
Why is my health score low when profits are good?
The score considers trends and stability, not just current performance. Check if margins are volatile or declining.
How do I improve my health score?
Focus on the weakest components: improve margins, grow revenue, control expenses, or stabilize performance.
Can I customize the health score formula?
The weights are currently fixed, but threshold settings let you adjust what's considered "good" for your business.
Why don't the numbers match my P&L report?
Check date ranges and account classifications. Some items may be categorized differently.
Related Dashboards
- Liquidity — Cash impact of profitability
- True Cost — Understand overhead affecting margins
- Revenue Intelligence — Customer profitability