This metric shows how efficient your company is at generating profit compared to its revenue.
Business net profitability is great for predicting long-term business growth. This business metric can also be used to see if your revenue exceeds your business costs.
How to calculate:
Business profitability = (Balanced profit / Sales costs) x 100
How to improve the indicator:
The net profitability of a business can lebanon mobile phone number list be improved by increasing revenue. It is necessary to identify the largest cost items and think about their possible optimization. In addition to optimizing costs and expenses, you can raise prices, find suppliers with lower prices, increase the share of popular goods, engage in promotion and advertising, motivate employees and improve the quality of the service offered.
3. Gross Margin (gross profit)
The higher your gross profit, the more your company earns per dollar of sales. You can invest it in other operations.
How to calculate:
Gross Profit = (Total Sales - Cost of Goods or Services Sold) / Total Sales
How to improve the indicator:
Gross profit increases with increased turnover. It is necessary to get rid of unsold products that take up space in warehouses.
An analysis of the profitability of the products sold will demonstrate, for example, which beauty products or services in a beauty salon should be abandoned and thus reduce the costs of their maintenance. It is possible to sell such products by arranging sales with large discounts.