Articles

Interest Cover Benchmark Calculation

How it’s Calculated Total Net Profit (before owners’ salaries & remuneration) = _____________________________________                      Total Interest expense   How it’s Used Higher results show that the business is highly capable of servicing its interest expenses. Interest cost is often not reported on its own – it also includes Bank and Credit Card charges.  As a result, […]

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Growth Capacity Benchmark Calculation

  How it’s Calculated   Growth Capacity calculation:   $ of Net Profit – ($ of Current assets – $ of Current liabilities) = ______________________________________  x 100                                        Turnover   How it’s Used   This ratio shows […]

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Net Profit Benchmark Calculation

How it’s calculated Net Profit can be calculated before owner’s salary (bos) is removed or after owner’s salary (aos) is removed. Net Profit (bos) calculated as: Total Income – Expenses (excluding Owner’s Wages and Superannuation)   Net Profit (aos) is calculated as: Total Income – Expenses – Owner’s Wages – Owner’s Superannuation   How It’s […]

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Net Profit per Owner Benchmark Calculation

How it’s calculated Net Profit per Owner can be calculated before owner’s salary (bos) is removed or after owner’s salary (aos) is removed.   Net Profit (bos) per Owner is calculated as: Net Profit (bos)  / Full Time Equivalent (FTE) Owners   Net Profit (aos) per Owner is calculated as: Net Profit (aos) / Full […]

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What is ‘Employee Wages as a Percentage of Total Income’?

What is ‘Employee Wages as a Percentage of Total Income’? Home Articles Business Benchmarks Reviewing employee wages is a crucial activity for any business owner. When monitoring and evaluating employee wages, the owner’s wage should be excluded. Employee wages also excludes all superannuation and bonuses. Total income refers to the total revenue (being sales and [...]
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