Key KPM figures - Before Tax Profit as a Percentage of Sales
Key performance metrics (KPMs), used to evaluate the success of a business, differ for businesses based on various factors. These factors can include the size of business and geographic location.
One KPM that should be on every business’s must-have list is the metric for before tax profit as a percentage of sales. Before Tax Profit is a measure of profitability as it allows for a company to view profits before they have to pay corporate income taxes.
The above graph tracks before tax profit as a percent of sales for the past ten years for profit leaders and profit challengers. The Dynamic Ratios take this profitability measure and turn it into a proportion of sales. Turning before tax profit into a ratio of sales allows for this figure to be comparable across many companies.
How do you compare to your competitors? Over the past ten years, the average profit leader was around 10 percent more profitable in before tax profit than the average printer each year.
How do you align your company to have great before tax profit as a percentage of sales? First, you need to know where you stand. The new dynamic ratios will provide an easy to understand graphic that will easily show where you are and where your company has room for improvement. Complete the survey today at www.printing.org/ratios.