Profitability Analysis (CO-PA) answers which products, which customers and which regions actually make money. Where the FI P&L gives one company-wide result, CO-PA breaks that result down along whatever dimensions matter.
The questions it answers
Knowing that operating profit was a billion yen decides nothing. What is needed is the composition.
- Product A has a healthy margin — is product B actually loss-making?
- Customer X buys in volume, but after discounts and logistics, is the account profitable?
- Is the Kansai sales office more profitable than the others?
- Is the newly launched product C achieving the margin we assumed?
Answering these requires revenue and cost to be held broken down by product, customer and region. That is what CO-PA does.
Characteristics and value fields
| Element | Role | Examples |
|---|---|---|
| Characteristic | The dimension analysed along | Product, product group, customer, sales organisation, region, distribution channel |
| Value field | The amount or quantity measured | Revenue, discounts, material cost, freight, quantity sold |
Each combination of characteristics is a profitability segment. "Product A × customer X × Kanto region" is one segment, and value fields accumulate against it.
Costing-based and account-based
CO-PA comes in two forms that store data quite differently.
| Aspect | Costing-based | Account-based |
|---|---|---|
| Container for amounts | Value fields, freely defined | Cost elements, i.e. G/L accounts |
| Agreement with FI | May differ | Always agrees |
| Cost of sales detail | Split by cost component | A single cost of sales figure |
| Timing | Can recognise estimated cost at delivery | Follows the FI posting |
| Suited to | Margin driver analysis, contribution management | Management that prioritises agreement with FI |
The strength of costing-based CO-PA is seeing cost of sales split into materials, labour and overhead, so a weak margin can be traced to its components. The cost is that amounts are copied into separate value fields and can diverge from the FI P&L.
Account-based CO-PA uses cost elements directly, guaranteeing agreement with FI, at the price of seeing cost of sales only at account level.
How data reaches CO-PA
| Source | What flows | When |
|---|---|---|
| SD billing | Revenue, discounts, quantity | When the billing document posts |
| CO-PC | Standard cost by cost component | At goods issue or billing |
| Internal order settlement | Promotional spend and similar | At period-end settlement |
| Cost centre assessment | Allocated overhead | At period-end allocation |
| Direct FI posting | Other income and expense | At posting |
The SD inflow requires mapping condition types to value fields — condition PR00 into the revenue value field, for instance. Getting that mapping wrong means revenue does not accumulate correctly.
CO-PA reports are run with KE30, which builds drill-down reports placing characteristics on rows and columns and summing value fields.