## How to use Excel XLOOKUP Function – 7 tips for Reporting and Analysis using XLOOKUP

Course: If you would like to learn in detail, how to calculate sales variances and the impact they have on sales \$, profit \$ and profit margin %, and how to explain performance vs budget and prior periods, click on the link for a detailed video course (at a special price). You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel templates. https://bit.ly/3xjMR8t

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Learn how to use Excel XLOOKUP and what this function can do for you. In this video, I will share 7 practical ways in which you can use the new XLOOKUP function which serves as a perfect replacement for both VLOOKUP and XLOOKUP.

We start with a real life work situation where you have to respond with data requests quickly. The first situation being where the General Manager is asking for Sales for specific customers within 5 minutes. Not only do you provide him the information requested within 5 minutes, but you go above and beyond to provide additional information that he may be interested in. In the second example, your Manager is asking you to complete and send the sales commission file based on annual sales and commission plan. You use XLOOKUP Match mode functionality to quickly respond to the Manager with the completed sales commission report.

In the third example, you have been asked by the Purchasing Manager to provide him help with pulling the most recent purchase price from a long list of materials and purchase history. You use the Search Mode argument of the XLOOKUP function to reverse the order of the data and provide by material SKU, the most recent purchase price and earn bragging rights.

In the fourth example, the external auditors have asked you to provide information related to customers, in a layout which is the opposite of how your sales data is set up. Knowing well that XLOOKUP can replace horizontal lookup or HLOOKUP, you quickly pull the information in the requested format and respond to auditor’s request.

Finally I share a tip that I have personally been using since the VLOOKUP days which would help you avoid XLOOKUP error, when by mistake the data ranges (lookup array and return array) are not aligned. This tip actually saves a lot of time as well and has been one of my favorite tips.

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## Make these 4 Changes to Your Resume before you apply for your next Job

Your resume or CV is your gateway for landing jobs. In most cases, you apply by submitting your resume. If you do not have a job, second to networking with the right people, updating your resume is the most important thing you can do. It is worth spending a lot more time than you already have. But what is wrong with your resume? Why does nobody contact you after you have applied.

The Mindset of Hiring Managers

When I did not know what goes on behind the scenes, I was so upset with not getting any responses from the employers that I started believing that most of the job postings are fake. But that is not true. Unfortunately, in the field of Accounting and Finance, despite many open vacancies, the number of applicants for each job is usually very high. As a result the only option left with the hiring managers, whether from Finance or HR function, is to quickly skim through the resumes and shortlist candidates. Do you know what this means? This means they are looking to eliminate candidates first before they start really going through the resumes in more detail to see if the candidate is the right fit. This is why tailoring your resume to each job posted is so important. Here are my 3 tips on tailoring your resume that will make it stick, and lead to an interview call.

1) Be Selective

Let me suggest to you here that despite your keenness on landing any and every job interview, you need to be selective as well. Just like the hiring managers, you should be able to eliminate jobs postings that do not seem relevant to your experience. Guard your energy level when applying for jobs. From the available list of job postings you should be able to short list jobs that you think are at least a 75% match with your experience and skills. I am not saying that you do not apply on job postings that are under 75% match, they can be part of your second round, once you are caught up with all the 1st grade matches. In the world of abundant applicants, quality and uniqueness is the key.

2) First things First

Once you have identified the jobs, read the description slowly and try to create a mental picture of what the role looks like. What are the challenges that the current employers are facing? What would be there ideal candidate for this role? Then start listing the experience, skills and achievements that match the requirement. Make sure to list the most important skills for the job first. The first few seconds of reading your resume are the most crucial so that you do not become part of the elimination list. If they read the first few lines of your resume, chance that they will read the rest of it increases dramatically, and so do the chances of you being called for interview.

3) Add examples, stats and numbers

Once you have the mental picture of the job requirements, you know exactly which of your experiences, skills and examples you need to highlight early in your resume so that it lights up the tired eyes of your recruiters or hiring managers. For example, if the role is related to the manufacturing industry, and you have worked for a manufacturing company as well as a retail and and a service firm, you know they will be most interested in your manufacturing experience. I can even predict that if you get an interview call, they will be asking questions mostly about your time and experience in the manufacturing company.

So, you need to highlight the same experience. Your resume will be heavy on your manufacturing experience. Not only that, even your experience details for retail and service industry should highlight skills that are similar to, or transferable to the manufacturing industry. Add numbers and details. If you helped the company save costs. Don’t just say that! Mention how you did that and how much cost you saved. For example you can state on your resume; “helped save \$300,000 by identifying vendor billing errors over a period of three months” (true story by the way!). It does not really matter if the amount is small. It shows that you care and are always looking to add value to your organization which makes you stand out from the crowd. If you got promoted quickly, mention that. If you received a special award or recognition for your performance, mention that. Whatever is true and can make you stand out without sounding overly arrogant, you should include in your resume with examples and numbers.

4) Always include a carefully written cover letter

I have never submitted a resume without a cover letter. Even if the job posting clearly asks for a two page resume, my two page resume will always be followed by a cover letter. Ideally, the cover letter should be the first page the hiring managers or recruiters should see. A well written cover letter can make all the difference. Generally, the resume is very rigid and restricted in the quantity and type of information you can include in it.

A cover letter can take the form of a conversation though and that is where lies its power. I do not recommend the cover letter being longer than a single page. But you can summarize your most important strengths and skills, directly related to the job in the cover letter. The cover letter should be written in such a way that if someone does not even read your resume, they know what you bring to the table. This does not mean you summarize all your skills, experience and qualifications on the cover letter. The cover letter is all about exactly what you have determined to be the most important skills and experience required based on reading the job posting. Use formatting such as bold and italics to guide the eye of the recruiter to the most important and interesting facts about you.

Note: If you would like to learn in detail, how to calculate sales variances and the impact they have on sales \$, profit \$ and profit margin %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special discounted price for readers of this post) showing exactly how this is done. You also learn how to analyse and present the results of the variances to management.

In order to make the cover letter stand out, I have often included remarks, or comments received during my previous employments. For example, once while I was a Senior Financial Analyst, the CFO of the organization remarked, “you have raised the bar in the FP&A department”. Guess what? this phrase is a permanent fixture, typed in bold format, in all of my cover letters. By doing this, the reader gets intrigued and likes to read more on the cover letter. Once you have there attention for 15 seconds, you are probably off of their elimination list and the likelihood of them calling you for interview also increases significantly. You can also include similar statements or remarks in your cover letter, as long as they are true.

I have a YouTube channel with helpful accounting and finance, Excel and career related videos. You can find my channel by clicking on the link LearnAccountingFinance.

If you would like to be notified of my new articles and video posts, make sure you join my email list by clicking here and subscribing to my email list. Lets connect! All the best!

## Explaining the impact of Sales Price, Volume, Mix and Quantity Variances on Profit Margin (Current year vs Last Year)

How to explain the impact of Sales Variances on Profitability or Profit Margin of a business? In this article, I am going to explain with the help of an example, how to calculate sales variances, and how to understand the impact of these variances on the profitability of your business. Note that we are calculating the impact of Sales Variances on Profit. This is different from explaining sales variances on Sales \$.

Note: If you would like to learn in detail, how to calculate sales variances and the impact they have on sales \$, profit \$ and profit margin %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel templates.

By the time, you are finished with the article, you will be able to understand clearly how to calculate these variances. I will try to be concise, so I assume you are already aware of terms like Sales, margin, profits and variance etc. If you are not fully aware, click on Commonly used financial terms every new Financial Analyst and Accountant should know! where I explain these and other commonly used terms. Also, start following our blog and YouTube channel LearnAccountingFinance, so that you can stay up to date with practical information and training (knowledge you can use immediately at your work).

What you will learn?

We will start with data in the following example. The example uses data for 2017 and 2018 (current year vs last year) to calculate the variances. However, if you are trying to calculate variances versus budget, simply replace last year (2017) with Budget data and the calculation will work just fine.

In this example, we are selling three products which are 1) Apples, 2) Bananas and 3) Oranges. We have data for Sales, Cost of Sales and Profit margins. We also have the quantity, or number of units sold. See Tables below

As this article is about calculating the impact of Sales variances on Profit margins, we have deliberately kept the cost per unit as same over the two periods to avoid confusion. However, when calculated correctly, it does not matter if cost per unit has changed. As you will see in the calculations, sales variance calculations do not take into account change in costs. The only thing to consider in that case would be that the profit margin change would have an element of variances from costs as well which needs to be calculated separately (cost variances). In our example however, the profit margin increased by \$268 and all of it is resulting from Sales related variances. After performing all variance calculations, you will see the split of variances as follows:

Types of Sales Variances

Lets look at types of sales variances quickly. Broadly, there are only two types of Sales variances.

1. Price Variance (Change in Selling Price)
2. Volume Variance (Change in Volume)

The Volume variance is further sub-divided into Quantity and Mix Variances. Do you like acronyms. Here is a good one to remember. Its PVTM

Accounting Explained in 100 Pages or Less: https://amzn.to/3rCProc

## Sales Variance

where ‘P’ is for Price Variance, and ‘V’ is for Volume Variance. ‘T’ for Quantity and ‘M’ is for Mix.

If we calculate our variances correctly, the sum of Price and Volume variances should be equal to the total change in Profit Margin (excluding the impact of cost variances). Similarly the sum of Quantity and Mix variances should equal Volume variance. Its time to calculate each of these variances individually.

Selling Price Variance

Lets deal with Price variance first. Any change in price directly impacts Profit margin. From the data available, you can easily calculate the selling price per unit of each fruit (Amount of Sales (\$) for each fruit sold divided by the number of units sold). So, for example for Apples, the selling price for 2018 is \$11 (\$660 Sales / 60 units sold). Similarly, the selling price of apples in 2017 was \$10. Below is the table of selling prices per unit.

Looking at the table above, we can clearly see that the Selling price for apples and oranges have increased in 2018 compared to previous year, while that of bananas has decreased. This means, if we look at selling prices alone, we should see a favorable impact, or favorable variance from apples and oranges and unfavorable impact from bananas. Now, Selling Price variance will be calculated as follows:

### (2018 Selling price – 2017 Selling price) x Units sold in 2018.

For apples, this can be calculated as:

(\$11 – \$10) x 60 units = \$60 Fav.

Why did we use 2018 number of units sold, and not 2017 units? The answer is that we are trying to determine the impact of change in Selling price. In other words, we are trying to see if the 60 apples sold in 2018 were sold at 2017 price, how would this compare with 2018 price. Therefore, the variance could also be calculated as follows:

### Apples sold at 2018 Price – Apples sold at 2017 Price

which is …

(\$11 x 60) – (\$10 x 60) = \$60

Apply the same logic to bananas and oranges

Bananas – Sales Price variance = (\$1.5 – \$2) x 95 = -\$48  Unfav. (numbers are rounded)

Oranges – Sales Price variance = (\$10 – \$8) x 50 = \$100 Fav

Here is the summary of Selling price variances,

So, we can say out of total change in profit margin of \$268, Price variance represents \$113 (rounded), and we can also see that oranges are the largest contributors to the fav. price variance.

Volume Variance:

This leads to the calculation of our second variance; Sales Volume variance. Sales variances comprise of Price and Volume only. Since we have calculated Price variance already, we can already calculate the total volume variance which would be…

Sales Volume variance = Total Sales Variance – Sales Price Variance

\$268 – \$113 = \$155

However, we need to still calculate it, as well as the two sub Volume variances, which are Quantity and Mix.

### (2018 Units Sold – 2017 Units Sold) x 2017 Profit Margin per Unit

Yes, I know you have some questions here.

1. Why did we use Profit Margin per unit, and not Selling Price?
2. OK, even if we use Profit Margin, why 2017 and not 2018.

Answer to Question 1. Remember we are trying to explain the impact of Sales variances on profit margin, not total Sales \$. If we had taken Selling price instead of Profit margin, we would be explaining Sales \$ variance (change in Sales \$ from 2017 to 2018), but we are calculating the impact on Profit margin. For each increase or decrease in unit sold vs last year, the profit margin will be impacted only by the amount of profit margin per unit and not the total Sales value. Understanding this is important. Note that in the calculation of two sub Volume variances (Mix and Quantity) as well, we will use profit margin per unit and not Selling price per unit.

If you have understood answer to Q1, then you can also understand that when we calculated price variance, we took into account the change in profit margin per unit in 2018 (change in selling price directly impacts the profit margin). Now we are calculating the impact of change in volume (or number of units) and should exclude the impact of change in Profit margin in 2018. This is why we use 2017 Profit Margin. Think about it for a little while, internalize it and if you still do not understand, leave a comment and I will try to explain further.

Time to do the Math:

At this point, we have understood the impact of Sale price and volume on the \$268 change in Profit Margin in 2018 vs 2017.

However, our analysis is not finished, and we need to understand the impact of Mix and Quantity.

Sales Mix Variance:

Sales Mix refers to the share of each product in total Sales, in terms of percentage. If you look at the number of units sold, you will see that in 2017, 50 apples were sold which is 28% of total sales of 180 units (50/180).

Sales Mix variance can be calculated as …

### (2018 Mix % – 2017 Mix %) x Total units sold in 2018 x 2017 Profit Margin

So, our Sales Mix variance for each fruit will be as follows:

The share of apples in the overall product mix increased to 29% in 2018 (60/205). This change in mix of 1% multiplied by the total number of units sold in 2018 (205) will give us the number of apples sold that resulted in the increase in Mix %. In this case it is 3 apples (1% x 205 = 3). We know that the total number of apples increased by 10 (50 in 2017 and 60 in 2018). So out of the total Volume change of 10 apples, 3 apples represent Mix change and the remaining 7 represent Quantity change. We can see from the variances above that a drop in mix % of bananas by -9% has impacted the profit margin unfavorably by -\$19 but this has been more than compensated by the increase in Mix % of Oranges by 8% (which has a higher Profit margin per Unit compared to bananas).

Calculating Mix variance separately in this way is important because each product has a different profit margin. Assuming the overall volume increased from 180 to 205 (just as in our example) but the mix remained the same as last year, then the change in total profit margin of the business would have been different, although we see the same quantity increase. This calculation of impact of increase in quantity while maintaining the same mix as last year is really our next variance, the Quantity Variance. Calculating Mix variance also helps when trying to explain Profit Margin % changes over the years, or vs budget because Quantity variance has neutral impact on % Profit Margin.

Sales Quantity Variance

As mentioned above, Sales Quantity variance measures the impact of increase in volume, or quantity while maintaining previous year’s mix.

### = (2018 Units sold @ 2017 Mix – 2017 Units Sold) x 2017 Profit Margin per unit

In our example fruit sales increased from 180 to 205. If the sale had increased maintaining the same product mix as 2017, our unit sales for 2018 would be as follows:

And the Sales Quantity Variance can be calculated as follows:

Conclusion:

We have calculated all the variances now. The overall increase of \$268 in Profit margin can be clearly explained with Price increase resulting in fav. variance of \$113 and Volume increase resulting in fav. variance of \$155. The volume increase includes \$79 due to change in Product Mix.

Note: If you would like to learn in detail, how to calculate sales variances and the impact they have on sales \$, profit \$ and profit margin %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel templates.

If you are also interested in learning how to calculate purchase price variance and the accounting entries involved in recording purchase price variance, click on the link How to calculate Purchase Price Variance (PPV) and track PPV accounting entries in SAP

Are you an accounting and finance professional looking to improve your financial analysis skills? Make sure you connect with me by subscribing to my email list. I will be sharing practical tips and advice that will help you transform you career this year. Click here to subscribe to my email list.

I have a YouTube channel with helpful accounting and finance, Excel and career related videos. You can find my channel by clicking on the link LearnAccountingFinance. Leave a comment if you found this information helpful or if you have any questions!