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Key #9 Total Gross Profit

Category: Gross Profit

For this key number, we want to know what percent of total sales was gross profit. That is, the total of all sales of all types less the cost of those sales expressed as a percent of the total sales amount.


Last month Acme Auto had total sales of $50,000.
The cost of those sales was $19,750. This includes cost of technician gross pay ($7,250), cost of parts ($11,000), cost of tires ($1,500) and cost of anything else that was sold.
$50,000 less $19,750 = $30,250 profit.
$30,250 ÷ $50,000 = 0.605

So, our key number is 60.5%

When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 58% and 62%.


Total sales:
Includes sales of all parts, shop supplies, labor, sublet, and tires.
Gross profit:
The total profit on the sale of something before any expenses or other costs of any kind are deducted.

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