Net Profit per Owner Benchmark Calculation

Apr 12th, 2019

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 Time Equivalent (FTE) Owners

See here for explanation of Net Profit (bos) and Net Profit (aos) Benchmark Calculation

See here for explanation of Full Time Equivalent Benchmark Calculation

How It’s Used

In addition to the Net Profit Benchmark, which serves as a good baseline measure of a company’s performance, the Net Profit per Owner Benchmark provides the added benefit of showing business owners the how much other similar business owners are taking home at the end of the day.

As with other performance metrics, the Net Profit per Owner Benchmark enables owners to assess whether their business costs and productivity are in check. For example, a low Net Profit per Owner result indicates cost of goods, operating expenses and staff productivity should be analysed more closely. Whereas a strong Net Profit per Owner may indicate opportunity for growth and investment.

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