Revenue is growing but contribution margin is shrinking
Contribution margin fell from 27.7% to 22.0% (5.7 points) while revenue grew +88%.
- Classification
- Scenario
- Claim strength
- Bounded Diagnosis
- Severity
- High
- Confidence
- High
- Coverage
- 100%
- Owner
- Founder
Illustrative counterfactual — not money lost
£67,214 (illustrative, this period)
Illustrative: net revenue excluding tax for the whole business in this period, held at the preceding period's margin of 27.7% instead of 22.0%. A counterfactual on a measured base — NOT money lost, not a forecast.
What the evidence supports
A smaller share of each pound of sales survived cost of goods in this period than in the preceding one, for the products whose costs are known.
What it does not prove
That contribution fell. It did not — the pounds grew; the share of each pound did not.
Signal to re-read: Contribution margin, monthly