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Key Numbers 101 Series – Key # 6 Parts Gross Profit
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 # 6 Parts Gross Profit
For this key number, we want to know what percent of parts sales was profit. That is, the total sale price of parts sold less the cost of those parts expressed as a percent of the total parts sales price.
Last month Acme Auto had total parts sales of $23,000. The cost of those parts was $11,000. $23,000 less $11,000 = $12,000 profit.
$12,000 ÷ $23,000 = 0.522
So, our key number is 52.2%
When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 48% and 53%
There is a fill in the blank form where you can automatically calculate this number for your shop in our Business Calculators area available to Premium Members. This is a great learning and working tool for anyone in your shop who should know what the key numbers need to be.
https://www.automotivemanagementnetwork.com/business-calculators/
Definitions and notes:Total parts sales: Includes all parts of all types, fluids and shop supplies. Does not include tires.
Gross profit: The total profit on the sale of something before any expenses or other costs of any kind are deducted.
#autorepairgrossprofit
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