The Algorithm can also be used to monitor profitability
Figures from UK/USA /VBA Surveys show the following average performances of practices. In the samples annual turnover ranged from more than £150,00 to £9million.
In the surveys the Net profit as a % of Sales Income –(The profitability %) was assessed as:
Greater than 18% – “excellent”
15% to 18% – “good”
12% to 15% – “average”
8 to 12% – “below average”
below 8% – “poor”
We have standardised the profitability ratio as follows for our algorithm
Less than 8% Poor
8% - 12%. Average
12% - 17.5% Good
17.5%- Over 20% Excellent
The standard report will give the current Last Full years Profitability and the Projected Years Profitability
E.g. Last Full year (12m) 17.82%
Projected Year (7m) 18.45%
