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  • Key Numbers 101 Series – Key # 4 True Net

    Posted by Site Administrator on October 4, 2016 at 5:07 pm

    This series includes 24 Key Numbers. If you work on getting all of them in the ranges mentioned, your shop should be solidly profitable.

    Key Numbers 101 Series – Key # 4 True net

    For this key number we want to know what percent of total sales goes to the owner – including both net profit and the gross payroll that goes to him or her.

    Last month Acme Auto had total sales of $50,000

    Total net profit plus owner’s gross pay was $13,000

    $13,000 ÷ $50,000 = 0.26

    So our key number is 26%

    When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 20% and 25%.

    There is a fill in the blank form for this number in our Business Calculators area available to Premium Members.

    https://www.automotivemanagementnetwork.com/business-calculators/

    Definitions

    Gross Payroll: Total regular pay before anything is deducted. Does not include any benefits or non-regular compensation.

    Total sales: Includes all parts, shop supplies, labor, sublet and tires.

    #autoshopnetprofit

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    Site Administrator replied 7 years, 5 months ago 1 Member · 0 Replies
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