The “Chain Analysis Tool” is a computer application designed to facilitate the visualization and study of costs and profit margins along value chains. Data are entered into a preformatted Excel workbook; subsequent analyses and plotting of data on graphs are performed following unique mathematical algorithms. The data are converted into a format that presents the costs and margins based on a single product unit (e.g. kilogrammes of maize harvested or kilogrammes of rice flour processed). Data can be plotted using the CAT to illustrate the progressive aggregation of costs and profit margins up to the final value of the product; in other words, it illustrates how value is added along the chain. The CAT can display the value addition for either the entire production chain or for specific segments of the chain only (e.g. primary production, post-harvest handling, various stages of processing and commercialization). The data are presented in different formats, including box whisker charts which display the frequency distribution of data, as well as bar charts which show the average cost and profit margin contributions of a given percentile of the data set. Depending on the aim of the analysis, the input data can either be real values collected in the field or represent theoretical scenarios, future projections, best practice scenarios or a goal or target price set by a government or development programme. Analysts can also apply a range of criteria that reflect different time periods, a country or regions, type of chain actors, type of technology/technological packages applied, etc. Using the tool usually requires the collection of primary data on costs of production (from producers, processors, marketers, etc.); however, secondary data can also be entered. The more data is entered, the more meaningful the analyses will be. When new data are entered or any changes are made to the parameters, the CAT automatically updates all graphs, thus facilitating the performance of dynamic analyses. The CAT Excel sheet is available from UNIDO. Comparisons of value addition between different cases and scenarios (according to the selected criteria) can be made using the CAT. This has multiple advantages: chain actors can compare their performance with others and identify best practices, for example. Moreover, levels of productivity can be determined and compared in each segment of the value chain. Potentials for cost reductions and increases in profit per unit can be identified as well. The distribution of profit margins across the value chain’s various segments can be distinguished and subject to policy analyses and subsequent policy interventions. Furthermore, policymakers can build scenarios to reflect policy changes and the CAT can analyse how the cost structure and profit margins (a proxy for the economic incentive to produce) would change. The CAT can also be used for comparative analyses of cost structures in different time periods, countries or regions, technologies, etc. Finally, the CAT can be used to build a development vision among the actors within a value chain agreeing on common value chain development objectives. The tool can be applied to all phases of any project to improve chain management, diagnose current and future economic scenarios, develop action plans, evaluate impacts and monitor trends. It has been successfully used in the inclusive and sustainable development of seven agribusiness chains project within the framework of the UNIDO Venezuela Country Programme. Results were obtained in all of the above-mentioned areas. Further applications of the CAT to other value chain development contexts is beneficial for gathering further evidence of its usefulness, to learn more about the tool’s most effective applications and to fine-tune its programming. The CAT has the potential to spur development in any given value chain context.