Price/volume/mix analysis explains why revenue moved, not just how much. Enter units and prices for two periods by product to split the change into price, volume and mix effects that reconcile exactly to the total.
How it works
Explain the change in revenue between two periods by separating the effect of price changes, total volume and the shift in product mix, product by product.
Price effect = Σ Current units × (Current price − Prior price)
Volume effect = Σ (Total current units × Prior mix % − Prior units) × Prior price
Mix effect = Σ (Current units − Total current units × Prior mix %) × Prior price
Price + Volume + Mix = Current revenue − Prior revenueCommon uses
- Monthly and quarterly revenue bridges for management reporting
- Explaining revenue variances to boards and lenders
- Evaluating pricing actions and product-mix strategy
Worked example
The calculator above opens with this example. Change any input to see the results update instantly, or select Reset to return to these figures.
| Products | Product A | 12,000 | 45.00 | 13,200 | 46.50 Product B | 8,500 | 72.00 | 7,900 | 75.00 Product C | 4,200 | 128.00 | 5,100 | 124.00 Product D | 6,000 | 30.00 | 6,300 | 31.00 |
| Total revenue change | $164,400 |
| Price effect | $29,400 |
| Volume effect | $109,618 |
| Mix effect | $25,382 |
| Prior-period revenue | $1,869,600 |
| Current-period revenue | $2,034,000 |
Volume is the largest driver of the change ($109,618). Price + Volume + Mix reconciles exactly to the total revenue change.
Interpreting the results
- Volume measures the effect of selling more or fewer total units at the prior mix and prices.
- Mix is positive when sales shift toward products with higher prior-period prices.
- Price effects are measured on current volume, the most common convention in revenue bridges; state the convention in board materials.
Frequently asked questions
What is the difference between volume and mix effects?
The volume effect measures selling more or fewer total units at the prior period’s product mix and prices. The mix effect measures the shift in which products were sold: revenue rises when sales move toward higher-priced products, even if total units are unchanged.
Why do different PVM methods give different answers?
The order in which effects are calculated, and whether price is measured on current or prior volume, changes how the joint effect is assigned. Each method reconciles to the same total; the key is to use one convention consistently and disclose it.
Can PVM analysis be used for margin instead of revenue?
Yes. Replace price with unit margin to build a gross-margin bridge, which separates the effects of pricing, cost changes, volume and mix on profitability.
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