What will be the impact on profit of buying, for cash (C$), a piece of equipment which will reduce direct costs (COGS) by ▲X%?

Previous period total sales:

% Sales

Previous period Direct Job Costs (Cost of Goods Sold):

Previous period Fixed Costs (Operating and Overhead):

Previous period Break-even Sales:

Previous period labor as % of direct job costs:

Previous period materials as % of direct job costs:

Acquisition cost of equipment (C$):

Annual maintenance of equipment (M$):

Reduction in labor direct costs (▲XL%):

Reduction in materials direct costs (▲XM%):

Effect on profit from changes in direct costs (▲$):

Payback period in years:

Annualized return on investment (ROI):

This analysis provides a simple method to measure the effect of automating some of your construction processes. If the payback period and ROI are acceptable, then the investment should be made, if cash reserves allow. To see the impact of borrowing to fund the investment, see apps "Buy Equipment With Loan" and "Loan Effect on Profit and Cash Flow".