Other Important Ratios:
Other important ratios –These are operational not found in the P/L or Balance Sheet.
Revenue per Customer
This ratio was mentioned earlier but also belongs in the other important ratio category as it is one that is extremely important.
Direct Labor %
Tech labor divided by revenue. I have often said 3 things make profitability in this business: direct labor, advertising and materials. Keep them in line and we have profits. Keep any one of them out of line and we don’t.
# of Office people to production people
How effective is the office staff at controlling one of the three biggies mentioned above?
What % of revenue are you spending on marketing? Is it producing increased revenue? Is it being measured? Rather than looking at marketing spend as a percentage of total revenue a more useful ratio would be to look at marketing spend over new sales generated by the spend.
|Other Important Ratios Formula
Revenue per Customer Revenue / # of Customers
Direct Labor % Direct Labor / Revenue
# of Office People to Production People # Office People / # Production People
Marketing Expenditure Total Marketing Spend / Revenue
|Revenue Per Customer
|Direct Labor %
|# of Office People to Production People