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Profit Improvement metrics and KPIs

What are Profit Improvement metrics?

Crafting the perfect Profit Improvement metrics can feel overwhelming, particularly when you're juggling daily responsibilities. That's why we've put together a collection of examples to spark your inspiration.

Transfer these examples to your app of choice, or opt for Tability to help keep you on track.

Find Profit Improvement metrics with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI metrics generator below to generate your own strategies.

Examples of Profit Improvement metrics and KPIs

Metrics for Profit increase strategies

  • 1. Net Profit Margin

    Calculated by dividing net profit by total revenue, expressed as a percentage. It shows how much profit a company makes for each dollar of revenue.

    What good looks like for this metric: 10-20%

    Ideas to improve this metric
    • Reduce operational costs
    • Increase product prices
    • Enhance sales volume
    • Improve customer retention
    • Optimise supply chain

  • 2. Return on Investment (ROI)

    Determines profitability by comparing the gain from an investment to its cost, calculated as (Net Profit / Cost of Investment) x 100.

    What good looks like for this metric: 15-25%

    Ideas to improve this metric
    • Choose higher-yield investments
    • Reduce investment costs
    • Increase revenue from investments
    • Enhance marketing strategies
    • Improve financial forecasting

  • 3. Gross Profit Margin

    Calculated by subtracting cost of goods sold (COGS) from revenue and dividing by revenue, expressed as a percentage, indicating the efficiency of production and pricing.

    What good looks like for this metric: 20-40%

    Ideas to improve this metric
    • Negotiate better supplier terms
    • Increase production efficiency
    • Enhance sales and pricing strategy
    • Reduce waste in production
    • Control direct labour costs

  • 4. Operating Profit Margin

    Measures what proportion of revenue is left as profit after accounting for operating expenses, calculated by dividing operating profit by total revenue.

    What good looks like for this metric: 10-15%

    Ideas to improve this metric
    • Streamline operational processes
    • Reduce administrative expenses
    • Enhance revenue streams
    • Focus on core business activities
    • Minimise utility and overhead costs

  • 5. Expense Ratio

    Expresses the percentage of total expenses to total revenue, highlighting cost management efficiency.

    What good looks like for this metric: 60-80%

    Ideas to improve this metric
    • Implement cost-cutting measures
    • Monitor expenses regularly
    • Automate routine tasks
    • Negotiate better vendor contracts
    • Outsource non-core processes
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Implement these metrics

Tracking your Profit Improvement metrics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

Tability Insights DashboardTability's check-ins will save you hours and increase transparency

More metrics recently published

We have more examples to help you below.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

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