04A. Profitability KPIs: Operating Profit Margin

Episode 4 of Building Your Multi-Million Dollar Practice is all about understanding KPIs that measure Profitability and how they impact your clients and your advisory services. There are 7 separate profitability KPIs , but in this episode we’re going to go over three, with more to come next time. This means that we can discuss each metric in depth. The Operating Profit Margin KPI shows the company’s efficiency at controlling cost. Strong ratios indicate they are very good at containing cost. On it’s own it shows a snapshot view, but when you look at it in conjunction with the current ratio it gives much more value.  The formula: (Sales + Cost of Sales) / Net Sales