﻿ Rules basic concepts

# Basic concepts

A Rule allows defining an entity member as the result of a formula based on other members of the same entity. Rules are sets of formulas defined on members of the same entity. A Rule is associated to an entity and can be used with (or applied to) all InfoCubes structured by that entity.

A typical example is that of a profit & loss statement (P&L) where some P&L lines are calculated from other lines. Consider the P&L as being an entity in which the P&L lines are its members (as follows):

L01  Gross Sales

L02  Cost of goods sold

L03  Gross Margin

L04  % on GS

L05  Distribution costs

L06  Inventory

L07  Total distribution costs

L08  % on Gross Income

L09 marketing costs

L11  total mktg costs

L12  %

L13  R&D

L14  IT costs

L16  Other Operating Expenses

L17  Total Operating Expenses

L18 %

L23  Net Operating Income

Some lines are calculated from other lines, for example:

• L03 Gross margin = Gross Sales – Cost of goods sold

• L02 % on GS = Gross Income / Gross Sales * 100

• L05 Total Distrib costs = Distribution costs + Inventory

• L08 % on Gross Income = Total Distrib costs / Gross income * 100