Net Profit % Sales

Calculation: Net Profit ÷ Total Sales
What does it measure: The amount of a dealership’s net income in relation to the total sales earned.
Why is it important: It helps a dealership determine how much actual profit is made from each sale earned. The higher the net profit % sales, the better the dealership is at converting sales into profit.

Days to Break Even

Calculation: Total Expenses ÷ (Total Income ÷ No. of Days in Month i.e. 30.4 days)
What does it measure: The number of days required for a dealership to generate enough income to cover its expenses.

Department Contribution to Gross Profit (New, Used, Parts, Service)

Calculation: Department Gross Profit ÷ Total Dealership Gross Profit
What does it measure: Measures how much gross each of the 'traditional' departments contributes to the total dealership gross profit pool.
New + Used + Parts + Service = 100%

Department Contribution to Gross Profit (F&I Share)

Calculation: F&I Income ÷ Total Dealership Gross Profit
What it measures: Measures F&I income as a proportion of the 'traditional' gross pool that is represented by F&I income.
Why is it important: High F&I share indicates a heavier reliance on F&I to make the dealership profitable.

Front End (Orientation)

Calculation: New + Used Department Contribution to Gross Profit
What does it measure: A measure of orientation that indicates whether the dealership is front end driven.
Why is it important: Front end driven dealerships generally exhibit more volatile profits as they fluctuate with vehicles sales and associated market conditions. For a “well-balanced dealership”, we suggest 56% of gross income from the front end and 44% from the back end.

Back End (Orientation)

Calculation: Parts + Service Department Contribution to Gross Profit
What does it measure: A measure of orientation that indicates whether the dealership is back end driven.
Why is it important: Back end orientated dealerships are not as subject to the volatility of market conditions. However, it is important for a dealership to manage the front end as vehicle sales drive the back end in the long run. For a “well-balanced dealership”, we suggest 56% of gross income from the front end and 44% from the back end.

Gross % Sales (New, Used, Parts, Service)

Calculation: Department Gross Profit ÷ Department Sales
What does it measure: Each department's gross margin - a ratio of gross profit to department sales. Note, this KPI does not reflect the impact of selling expenses of the department (see Selling Gross % Gross under each department).
Why is it important: Reflects the proportion of each dollar of sales revenue that the department retains as gross profit. This KPI should remain stable over time.

Net Profit per Employee

Calculation: Total Net Profit ÷ Total Number of Employees
What does it measure: The average net profit generated per employee per month.

Sales per Employee

Calculation: Total Dealership Sales ÷ Total Number of Employees
What does it measure: The average sales generated per employee per month.

Gross Profit per Employee

Calculation: Total Dealership Gross Profit ÷ Total Number of Employees
What does it measure: The average gross profit generated per employee per month.
Why is it important: A comparison of net profit, sales and gross profit per employee over time may indicate where the strengths of your dealership staff lie. Examples include:
a) A high sales per employee figure but a low gross profit per employee figure: this may indicate that a dealership is able to manage volume of customers, but are not maintaining a strong margin
b) High sales and gross profit per employee figures but low net profit per employee: this may indicate that a dealership should focus on lowering costs

Gross per New Vehicle Retailed

Calculation: (Retail Gross Profit + Aftermarket + Holdback + Incentives) ÷ No. of Retail Units Sold
What does it measure: How much gross profit was earned on average for each retail new vehicle sold by the dealership.

Gross per New Vehicle Sold

Calculation: (Retail Gross Profit + Fleet Gross Profit + Government Gross Profit + Aftermarket + Holdback + Incentives) ÷ No. of Retail, Fleet and Government Units Sold
What does it measure: How much gross profit was earned on average for each new vehicle sold by the dealership.

Aftermarket per Unit

Calculation: New Aftermarket Income ÷ No. of Retail Units Sold
What does it measure: Indicates the amount of aftermarket generated on each retail new vehicle sold by the dealership.
Why is it important: Indicates how much aftermarket opportunity may exist for a dealership (opportunity may be measured as the difference between the dealership result and benchmark for this KPI).

Incentive Payment per Unit

Calculation: New Vehicle Incentive Payment Income ÷ No. of Retail Units Sold
What does it measure: How much target achievement and other new vehicle incentive payment related assistance from a factory is received on average for each retail new vehicle sold by the dealership.
Why is it important: Comparing this figure to Gross Profit per New Vehicle Retailed indicates how much gross profit generated from vehicle sales can be attributed to incentive/bonus income.

Holdback per Unit

Calculation: Holdback Income ÷ No. of Retail Units Sold
What does it measure: How much holdback is received on average for each retail new vehicle sold by the dealership.
Why is it important: Provides an indication of how much of gross profit generated from vehicle sales can be attributed to holdback.

Units Sold per Sales Employee per Month

Calculation: (No. of Retail, Fleet and Government Units Sold) ÷ No. of New Vehicle Sales Employees
What does it measure: The average number of new vehicles sold by each member of the new vehicle sales team.
Why is it important: A measure of salesperson's ability to sell vehicles and indicates the level of throughput at the dealership.

Gross per Sales Employee per Month

Calculation: New Vehicle Gross Profit ÷ No. of New Vehicle Sales Employees
What does it measure: The average gross profit generated by each member of the new vehicle sales team. 
Why is it important: A measure of salesperson's ability to be profitable when making vehicle sales. 

Total Selling Expenses % Gross

Calculation: (New Vehicle Department Variable Expenses + New Vehicle Department Semi-Fixed Expenses) ÷ New Vehicle Gross Profit
What does it measure: How much it costs to sell new vehicles as a proportion of how much profit the new vehicle department makes on the same sales. Note, this KPI does not reflect overheads but only those expenses that are considered directly related to the sale of vehicles i.e. 'selling expenses'.
Why is it important: Observing this total figure indicates if the costs are too high in the department given the level of sales at the dealership. Drilling down into the particular expense categories enables effective expense management and control.

New Vehicle Selling Gross % Gross

Calculation: (New Vehicle Gross Profit - New Vehicle Variable Expenses - New Vehicle Semi Fixed Expenses) ÷ New Vehicle Gross Profit
What does it measure: How much gross profit is actually retained by the new vehicle department.
Why is it important: Selling gross % gross profit is the measure of departmental profitability in ProfitFocus reports. Even if a dealership manages a high level of sales volume, a low selling gross % gross figure indicates that the new vehicle department is still not that profitable. Often this may require a dealership to investigate the expenses of the department or the grosses required to sustain the current level of expenses. 

Selling Gross per New Vehicle Sold ($PNVS)

Calculation: (New Vehicle Gross Profit - New Vehicle Variable Expenses - New Vehicle Semi Fixed Expenses) ÷ No. of Retail, Fleet and Government Vehicles Sold
What does it measure: How much gross profit was retained on average for each new vehicle sold by the dealership.
Why is it important: It is useful to compare this KPI to Gross Profit per New Vehicle Sold. If this figure is low, but 'gross per unit' is high - the dealership should investigate the department's expense control.

Selling Gross per New Vehicle Sales Employee

Calculation: (New Vehicle Gross Profit - New Vehicle Variable Expenses - New Vehicle Semi Fixed Expenses) ÷ No. of New Vehicle Sales Employees
What does it measure: How much gross profit was retained on average for each new vehicle sales employee.
Why is it important: It is useful to compare this KPI to Gross per Sales Employee per Month. If this figure is low, but 'gross per sales employee' is high - the dealership should investigate the department's expense control.

New Vehicle Days Supply

Calculation: (No. of New & Demonstrator Vehicles on Hand ÷ No. of New & Demonstrator Vehicles Sold) × No. of Days in Month i.e. 30.4 days
What does it measure: How many days the dealership can sustain sales for based on levels of new vehicle stock and current sales performance.
Why is it important: Indicates how well new vehicle stock levels are controlled. Consistently high days supply figures should be addressed as there is a direct correlation to stock holding costs of the dealership e.g. floorplan interest.

Ageing of Stock

Calculation: Value of Stock Held for 0-30* Days ÷ Value of Total Stock Held*Ageing categories are 0-30 days, 31-60 days, 61-90 days, 90+ days.
What does it measure: Measures the mix of stock based on the date they were brought into stock.
Why is it important: Indicates how long dealers are holding their stock (i.e. being unable to sell them).

ROI (Gross ROI)

Calculation: (New Vehicle Gross Profit ÷ New Vehicle Cost of Sales) × (365 Days ÷ New Vehicle Days Supply)
What does it measure: A measure of the efficient utilisation of current investment in inventory. The higher the figure for the KPI, the better return a dealership is getting from holding stock.

Used to New Ratio

Calculation: No. of Used Retail Units Sold  ÷ No. of New Retail Units Sold
What does it measure: Measures the mix of used retails vehicles sold as a proportion of all retail vehicle sales at the dealership.

Retail Gross per Unit

Calculation: Total Used Retail Gross Profit ÷ No. of Used Retail Units Sold
What does it measure: How much gross profit was earnt on average for each used car retailed.

Wholesale Gross per Unit

Calculation: Total Used Wholesale Gross Profit ÷ No. of Used Wholesale Units Sold
What does it measure: How much gross profit was earnt on average for each used car wholesaled.
Why is it important: Low to negative figures for this KPI may indicate that a dealership is not getting any particular benefit from wholesaling or trade-ins. The used cars the dealership is accepting may not have many prospects.

Net Gross per Used Vehicle Retailed

Calculation: (Used Retail Gross Profit + Used Wholesale Gross Profit) ÷ No. of Used Retail Units Sold
What does it measure: Vehicle gross profit generated by the used vehicle department expressed on a per retail unit basis.

Units Sold per Sales Employee per Month

Calculation: No. of Retail Units Sold ÷ No. of Used Vehicle Sales Employees
What does it measure: The average number of retail used vehicles sold by each member of the used vehicle sales team.
Why is it important: A measure of salesperson's ability to sell vehicles and indicates the level of throughput at the dealership.

Gross per Sales Employee per Month

Calculation: Used Vehicle Gross Profit ÷ No. of Used Vehicle Sales Employees
What does it measure: The average gross profit generated by each member of the used vehicle sales team. 
Why is it important: A measure of salesperson's ability to be profitable when making vehicle sales. 

Total Selling Expenses % Gross

Calculation: (Used Vehicle Department Variable Expenses + Used Vehicle Department Semi-Fixed Expenses) ÷ Used Vehicle Gross Profit
What does it measure: How much it costs to sell used vehicles as a proportion of how much profit the used vehicle department makes on the same sales. Note, this KPI does not reflect overheads but only those expenses that are considered directly related to the sale of vehicles i.e. 'selling expenses'.
Why is it important: Observing this total figure indicates if the costs are too high in the department given the level of sales at the dealership. Drilling down into the particular expense categories enables effective expense management and control.

Used Vehicle Selling Gross % Gross

Calculation: (Used Vehicle Gross Profit - Used Vehicle Variable Expenses - Used Vehicle Semi Fixed Expenses) ÷ Used Vehicle Gross Profit
What does it measure: How much gross profit is actually retained by the used vehicle department.
Why is it important: Selling gross % gross profit is the measure of departmental profitability in ProfitFocus reports. Even if a dealership manages a high level of sales volume, a low selling gross % gross figure indicates that the used vehicle department is still not that profitable. Often this may require a dealership to investigate the expenses of the department or the grosses required to sustain the current level of expenses. 

Selling Gross per Used Vehicle Retailed ($PUVR)

Calculation: (Used Vehicle Gross Profit - Used Vehicle Variable Expenses - Used Vehicle Semi Fixed Expenses) ÷ No. of Used Retail Units Sold
What does it measure: How much gross profit was retained on average for each used vehicle sold by the dealership.
Why is it important: It is useful to compare this KPI to Gross Profit per Used Vehicle Sold. If this figure is low, but 'gross per unit' is high - the dealership should investigate the department's expense control.

Selling Gross per Used Vehicle Sales Employee

Calculation: (Used Vehicle Gross Profit - Used Vehicle Variable Expenses - Used Vehicle Semi Fixed Expenses) ÷ No. of Used Vehicle Sales Employees
What does it measure: How much gross profit was retained on average by each used vehicle sales employee.
Why is it important: It is useful to compare this KPI to Gross per Sales Employee per Month. If this figure is low, but 'gross per sales employee' is high - the dealership should investigate the department's expense control.

Used Vehicle Days Supply

Calculation: (No. of Used Vehicles on Hand ÷ No. of Retail Used Vehicles Sold) × No. of Days in Month i.e. 30.4 days
What does it measure: How many days the dealership can sustain sales for based on levels of used vehicle stock and current sales performance. 
Why is it important: Indicates how well used vehicle stock levels are controlled. Consistently high days supply figures should be addressed as there is a direct correlation to stock holding costs of the dealership e.g. floorplan interest.

Ageing of Stock

Calculation: Value of Stock Held for 0-30* Days ÷ Value of Total Stock on Hand *Ageing categories are 0-30 days, 31-60 days, 61-90 days, 90+ days.
What does it measure: Measures the mix of stock based on the date they were brought into stock.
Why is it important: Indicates how long dealers are holding their stock (i.e. being unable to sell them).

Average Cost on Hand

Calculation: Value of Used Vehicle Stock on Hand ÷ No. of Used Vehicles on Hand
What does it measure: The average cost to holding a used vehicle at the dealership.
Why is it important: Provides an understanding of the value of the used vehicles the dealership has available to sell.

Average Cost of Sale

Calculation: (Used Vehicle Retail & Wholesale Sales - Used Vehicle Retail & Wholesale Gross Profit) ÷ No. of Retail Used Vehicles Sold
What does it measure: The average cost price of the retail vehicles that the dealership sells.
Why is it important: It is useful to compare the average cost that a dealership sells its used vehicles at to the cost to the dealership of holding the cars itself. If the average cost of sale is significantly lower than the average cost on hand, this may reflect a lost gross profit opportunity.

ROI (Gross ROI)

Calculation: (Used Vehicle Gross Profit ÷ Used Vehicle Cost of Sales) × (365 Days ÷ Used Vehicle Days Supply)
What does it measure: A measure of the efficient utilisation of current investment in inventory. The higher the figure for the KPI, the better return a dealership is getting from holding stock.

Vehicles Retailed per F&I Employee

Calculation: No. of New and Used Retail Units Sold ÷ No. of F&I Employees
What it measures: Measures the size of the opportunity available to F&I employees to sell F&I.
Why is it important: If this figure is high, it may indicate that capacity for more staff to be put on at the dealership. This would be validated if the figure for finance penetration was also low.

F&I Income per F&I Employee

Calculation: (Total Finance Income + Total Insurance Income) ÷ No. of F&I Employees
What it measures: Indicates how effective the department staff are at earning F&I income - a measure of income.

Finance Contracts (New & Used) per F&I Employee

Calculation: (No. of New Finance Contracts + No. of Used Finance Contracts) ÷ No. of F&I Employees
What it measures: Indicates how effective the department staff are at writing F&I - a measure of volume.

Finance Penetration - New

Calculation: No. of New Finance Contracts ÷ No. of Retail New Vehicles Sold
What it measures: The percentage of customers who purchase a new vehicle and also purchase finance.
Why is it important: Indicates how effective the salesperson is at converting new vehicle customers into finance customers.

Finance Penetration - Used

Calculation: No. of Used Finance Contracts ÷ No. of Retail Used Vehicles Sold
What it measures: The percentage of customers who purchase a used vehicle and also purchase finance.
Why is it important: Indicates how effective the salesperson is at converting used vehicle customers into finance customers.

Finance Income per Contract - New

Calculation: Total New Finance Income ÷ No. of New Finance Contracts
What it measures: How much finance income is generated on average for each new finance contract written. 
Why is it important: The higher the value for this KPI, the better the department staff are at generating new finance income.

Finance Income per Contract - Used

Calculation: Total Used Finance Income ÷ No. of Used Finance Contracts
What it measures: How much finance income is generated on average for each used finance contract written. 
Why is it important: The higher the value for this KPI, the better the department staff are at generating used finance income.

Insurance Income per Contract - New

Calculation: Total New Insurance Income ÷ No. of New Insurance Contracts
What it measures: How much insurance income is generated on average for each new insurance contract written. 
Why is it important: The higher the value for this KPI, the better the department staff are at generating insurance income from new vehicle customers.

Insurance Income per Contract - Used

Calculation: Total Used Insurance Income ÷ No. of Used Insurance Contracts
What it measures: How much insurance income is generated on average for each used insurance contract written. 
Why is it important: The higher the value for this KPI, the better the department staff are at generating insurance income from used vehicle customers.

Finance Income per Retail Sale - New

Calculation: Total New Finance Income ÷ No. of Retail New Vehicles Sold
What it measures: The amount of finance income received on average for each sales contract written on new vehicles.

Finance Income per Retail Sale - Used

Calculation: Total Used Finance Income ÷ No. of Retail Used Vehicles Sold
What it measures: The amount of finance income received on average for each sales contract written on used vehicles.

Average Finance per Retail Sale

Calculation: (Total New + Used Finance Income) ÷ (No. of New and Used Retail Units Sold)
What it measures: The amount of finance income received on average for each vehicle sold by the dealership.

Insurance Income per Retail Sale - New

Calculation: Total New Insurance Income ÷ No. of Retail New Vehicles Sold
What it measures: The amount of insurance income received on average for each sales contract written on new vehicles.

Insurance Income per Retail Sale - Used

Calculation: Total Used Insurance Income ÷ No. of Retail Used Vehicles Sold
What it measures: The amount of insurance income received on average for each sales contract written on used vehicles.

Average Insurance per Retail Sale

Calculation: (Total New + Used Insurance Income) ÷ No. of New and Used Retail Units Sold
What it measures: The amount of insurance income received on average for each vehicle sold by the dealership.

F&I Income per Vehicle Retailed

Calculation: (Total New & Used Finance Income + Total New & Used Insurance Income) ÷ No. of New and Used Retail Units Sold
What it measures: The average F&I income received on average for each sold by the dealership.

Sales Mix %

Calculation: Total Sales of Type ÷ Total Parts Sales
What does it measure: The contribution of each sales type towards the total sales of the parts department.
Why is it important: This is useful as some sales types are more profitable than others - see Gross Profit % Sales. As such, a mix that focuses more on lower grossing sales types (e.g. wholesale) will need to be offset by greater throughput in these areas.

Gross Profit % Sales

Calculation: Total Gross of Type ÷ Total Sales of Type
What does it measure: The gross profit margin for each sales type.
Why is it important: Reflects the size of the dealership's trade margins for each type of sale.

Monthly Sales per Employee

Calculation: Total Parts Sales ÷ No. of Parts Employees
What does it measure: The amount of sales generated on average for each person employed in the parts department.
Why is it important: Indicates how effective the department is at generating sales given the level of staff.

Monthly Gross Profit per Employee

Calculation: Total Parts Gross Profit (including Other Income) ÷ No. of Parts Employees
What does it measure: The amount of sales generated on average for each person employed in the parts department.

$ Sales per $ Salary

Calculation: Total Parts Sales ÷ Parts Salaries Expense
What does it measure: How much you pay your staff relative to their ability to generate sales.
Why is it important: Allows the dealership to assess its cost structure relative to sales as salaries are the predominant expense in the department.

Externally Generated Sales

Calculation: (Retail Sales + Wholesale Sales) ÷ Total Parts Sales
What does it measure: The ratio of retail (over the counter) and wholesale revenue against internal sales (workshop, warranty, internal).
Why is it important: Indicates how effective your penetration is in the trade and retail sales sectors. A high value for this KPI may lead to reduced gross profit margins but too low a value could indicate unrealised market opportunity.

Parts Days Supply

Calculation: (Value of Parts Stock on Hand ÷ Total Parts Cost of Sales*) × No. of Days in Month i.e. 30.4 days *Cost of Sales = Sales - Gross Profit
What does it measure: How many days the dealership can sustain sales for based on levels of parts stock and current sales performance.
Why is it important: Indicates how well parts stock levels are controlled. Consistently high parts days supply should be addressed as parts are susceptible to ageing and can bring about inventory obsolescence and other costs associated with holding stock.

Stock Turns per Annum

Calculation: 365 days ÷ Parts Days Supply
What does it measure: The number of times your parts inventory can be completely sold and bought in a year.
Why is it important: A low turnover rate may indicate that the dealership should assess its stock mix to address issues like overstocking, obsolescence or deficiencies in the model line or marketing effort. A high turnover rate may signal a dealership that there may be an inadequate level of inventory which may lead to a loss in business opportunity.

ROI (Gross ROI)

Calculation: (Parts Gross Profit ÷ Parts Cost of Sales) × Stock Turns
What does it measure: A measure of the efficient utilisation of current investment in inventory. The higher the figure for the KPI, the better return a dealership is getting from holding stock.

Sales Mix %

Calculation: Total Sales of Type ÷ Total Service Labour Sales
What does it measure: The contribution of each sales type towards the total labour sales of the service department.
Why is it important: Indicates where the department sales are coming from. The service department should be primarily retail focussed.

Relative Service Size

Calculation: Retail labour Sales ÷ No. of New Retail Units Sold incl. Fleet
What does it measure: It is a useful starting indication of customer retention at the dealership as it measures service operations relative to vehicle volume.

Unapplied Time (% Labour Cost of Sales)

Calculation: Unapplied Time ÷ (Labour Sales - Labour Gross Profit)
What does it measure: Measures the direct cost of unapplied time as a percentage of the total cost of labour. It is inversely proportional to labour gross sales results.
Why is it important: It is useful in reflecting workshop loading, utilisation and customer retention.

Chargeable to Non-Chargeable Ratio

Calculation: No. of Chargeable Employees ÷ No. of Non-Chargeable Employees3
What does it measure: Indicates the mix between chargeable and non-chargeable employees in the department.
Why is it important: If this figure is low (say compared to benchmark), it may indicate that there is more opportunity to bring on chargeable service employees.

Labour Sales per Chargeable Employee

Calculation: Total Labour Sales ÷ No. of Chargeable Employees
What does it measure: The amount of labour sales revenue generated on average for each chargeable employee employed by the department.
Why is it important: Indicates how effective the service advisor is at generating sales for the workshop given the level of staff available to complete repair orders.

Labour Gross Profit per Chargeable Employee

Calculation: Total Labour Gross Profit ÷ No. of Chargeable Employees
What does it measure: The amount of labour gross profit generated on average for each chargeable employee employed by the department.
Why is it important: A starting point for indicating productivity, efficiency, booking correctly, mix of work, prime cost and labour rate. For example, if this KPI is low, a service advisor should investigate if technicians are being booked onto the repair orders appropriate to their level of skill or training. Low values for this KPI indicates that the department may be unproductive and/or inefficient and will struggle to remain profitable.

Parts to Labour Ratio

Calculation: Total Workshop (Service Retail) Parts Sales ÷ Total Retail Labour Sales
What does it measure: The ratio of workshop parts revenue to retail labour sales i.e. for every dollar of retail labour generated, how much parts revenue was also generated. 
Why is it important: Indicates how efficient the service advisors are at selling parts. It also provides an indication of the level of cooperation between the parts and service department.

Parts and Service Absorption

Calculation: (Parts Department Gross Profit + Service Department Gross Profit) ÷ Total Dealership Expenses* *Excluding variable expenses in the new and used vehicle departments.
What does it measure: The contribution of the parts and service operations to negating the fixed costs of the dealership, providing stability during fluctuating sales demand
Why is it important: It depicts how vulnerable the dealership is to fluctuating demand for car sales. That is to say, to what extent does the income from the back end cover the fixed expenses of the dealership should there be no vehicle sales in a month. The higher the absorption rate, the easier it is for the dealership to trade profitably during periods of weak vehicle demand.

Productivity

Calculation: Hours Clocked ÷ Hours Available
What does it measure: The amount of technician time that has been clocked onto a job as a percentage of the total available technician time.
Why is it important: If low, this could mean:

• There is not enough work in the service department
• The process of booking repair orders may not be effective
• Are there issues with clocking and potentially billing?

Efficiency

Calculation: Hours Sold ÷ Hours Clocked
What does it measure: The amount of technician time that was able to be billed to a customer as a percentage of the total time they were clocked onto jobs.
Why is it important: If low, this could mean:

• Are the right technicians getting the right work to their skill level?
• Are there issues with discounting or costing at the front counter?
• Are there diagnostic issue in the service operations?
• Are the technicians and workshop staff motivated?