6 worked Product Profitability Analysis case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to product profitability analysis work, not a specific client's file.
Case Study 1 · CRA review defended
$98,000 Proposed Adjustment Withdrawn In Full — Succession-Planning Family Business, Lethbridge
Client: A family business planning succession · Where: Lethbridge, Alberta · Engagement: 11 weeks, fixed fee
Adjustment withdrawn$98,000
File closed in11 weeks
Penalties assessedNone
The situation — A family business planning succession, Lethbridge, Alberta
A family business planning succession in Lethbridge, Alberta received a proposal letter opening a review of product profitability analysis. The CRA had identified a healthy bank balance made up almost entirely of deposits for work not yet performed. It proposed an adjustment of $98,000, with 30 days to respond.
What we did for A family business planning succession, Lethbridge, Alberta
We treated the response as an evidence exercise rather than an argument. We traced each borrowing to what it actually funded and kept the interest deduction on the portion used to earn business income. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A family business planning succession, Lethbridge, Alberta
The proposed adjustment was withdrawn in full — all $98,000 of it. The file closed in 11 weeks with no change to the assessed amounts and no penalty.
Case Study 2 · Objection and relief
Notice Of Objection Allowed In Full, $75,000 Reversed — Multi-Line Service Business, Hamilton
Client: A business whose margin varies by service line · Where: Hamilton, Ontario · Engagement: 10 weeks, fixed fee
Amount reversed$75,000
ObjectionAllowed in full
Account balanceNil
The situation — A business whose margin varies by service line, Hamilton, Ontario
A business whose margin varies by service line in Hamilton, Ontario had been reassessed for $75,000. 7 days were left on the objection deadline. The reassessment rested on a borrowing drawn for an unrelated personal purchase with the interest claimed against the business.
What we did for A business whose margin varies by service line, Hamilton, Ontario
We filed the objection inside the deadline with a complete submission rather than a placeholder. Alongside it, we built a rolling thirteen-week cash-flow model, tightened collections, and renegotiated supplier terms so the growth stopped consuming the bank balance.
The result — A business whose margin varies by service line, Hamilton, Ontario
The appeals officer allowed the objection in full. $75,000 was reversed and the account returned to a nil balance.
Case Study 3 · Scaling without breaking
Growth Handled Without A Missed Filing, $113,000 Freed — First Finance Hire, Kitchener
Client: A company hiring its first finance staff · Where: Kitchener, Ontario · Engagement: 3 weeks, fixed fee
Cash freed$113,000
Compliance failuresNone
ReportingMonthly
The situation — A company hiring its first finance staff, Kitchener, Ontario
A company hiring its first finance staff in Kitchener, Ontario was opening in a second province. That meant different filing obligations and a different payroll regime. A monthly report that stopped at the income statement, with no balance sheet and no cash view already sat in the file.
What we did for A company hiring its first finance staff, Kitchener, Ontario
We produced a board-ready monthly package — cash, margin, pipeline and covenant headroom — that replaced a spreadsheet nobody trusted. We then put monthly reporting in place. That let the owner see the cash effect of growth while there was still time to act on it.
The result — A company hiring its first finance staff, Kitchener, Ontario
Growth was absorbed without a compliance failure. $113,000 of cash was released, and the monthly reporting now flags a problem while it is still small.
Case Study 4 · Structure rebuilt
Corporate Structure Rebuilt For $33,000 Of Annual Savings — Expanding Manufacturer, Toronto
Client: A manufacturer planning a plant expansion · Where: Toronto, Ontario · Engagement: 8 weeks, fixed fee
Saving per year$33,000
DocumentationComplete
Transfer basisRollover
The situation — A manufacturer planning a plant expansion, Toronto, Ontario
The structure at a manufacturer planning a plant expansion in Toronto, Ontario dated from years earlier. It had been set up for a business that no longer existed. Revenue up 40% year over year and a bank balance that kept falling had become expensive.
What we did for A manufacturer planning a plant expansion, Toronto, Ontario
We added the balance sheet and a cash view to the monthly package, so the owner saw working capital move rather than only profit. The reorganisation used the rollover provisions rather than a taxable transfer, so no tax fell due on the restructuring itself.
The result — A manufacturer planning a plant expansion, Toronto, Ontario
$33,000 of annual saving, achieved on a tax-deferred basis. The minute book, elections and valuations are all in the file.
Case Study 5 · Planning that cut the bill
Remuneration Review Saved $11,500 Across Corporate And Personal Returns — Practice Adding Partners, Surrey
Client: A professional practice adding partners · Where: Surrey, British Columbia · Engagement: 9 weeks, fixed fee
Combined saving$11,500
ScopeCorporate + personal
Future yearsNo rework needed
The situation — A professional practice adding partners, Surrey, British Columbia
Nothing was wrong at a professional practice adding partners in Surrey, British Columbia. The filings were on time and accurate. What they were not was planned. Pricing set by feel, with no visibility into margin by service line had never been reviewed.
What we did for A professional practice adding partners, Surrey, British Columbia
We rebuilt the reporting around gross margin by service line, which showed two of five offerings were losing money at the current price. We ran the numbers across both the corporate and personal returns, so the saving was real rather than deferred into someone else's hands.
The result — A professional practice adding partners, Surrey, British Columbia
$11,500 came off the combined corporate and personal tax bill, and the structure holds for future years without further work.
Case Study 6 · Backlog brought current
$12,000 Of Arbitrary Assessments Vacated After 7 Years — Subscription Business, Red Deer
Client: A subscription business tracking churn · Where: Red Deer, Alberta · Engagement: 6 weeks, fixed fee
Arbitrary tax vacated$12,000
Years brought current7
Account statusCurrent
The situation — A subscription business tracking churn, Red Deer, Alberta
7 years of unfiled returns had turned into notional assessments at a subscription business tracking churn in Red Deer, Alberta. Underneath lay a covenant breach discovered only when the bank called. Collections had already started.
What we did for A subscription business tracking churn, Red Deer, Alberta
We separated customer prepayments from earned revenue in the reporting, so the cash position and the tax position were visible at the same time. We then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — A subscription business tracking churn, Red Deer, Alberta
All 7 years were accepted as filed. $12,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 7 years.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
