KPI Guide - Total Dealership

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Net Profit % Sales

Calculation: Net Profit ÷ Total Sales

What does it measure: The amount of a dealership’s net income in relation to the total sales earned.

Why is it important: It helps a dealership determine how much actual profit is made from each sale earned. The higher the net profit % sales, the better the dealership is at converting sales into profit.

Days to Break Even

Calculation: Total Expenses ÷ (Total Income ÷ No. of Days in Month i.e. 30.4 days)

What does it measure: The number of days required for a dealership to generate enough income to cover its expenses.

Department Contribution to Gross Profit (New, Used, Parts, Service)

Calculation: Department Gross Profit ÷ Total Dealership Gross Profit

What does it measure: Measures how much gross each of the 'traditional' departments contributes to the total dealership gross profit pool.
New + Used + Parts + Service = 100%

Department Contribution to Gross Profit (F&I Share)

Calculation: F&I Income ÷ Total Dealership Gross Profit

What it measures: Measures F&I income as a proportion of the 'traditional' gross pool that is represented by F&I income.

Why is it important: High F&I share indicates a heavier reliance on F&I to make the dealership profitable.

Front End (Orientation)

Calculation: New + Used Department Contribution to Gross Profit

What does it measure: A measure of orientation that indicates whether the dealership is front end driven.

Why is it important: Front end driven dealerships generally exhibit more volatile profits as they fluctuate with vehicles sales and associated market conditions. For a “well balanced dealership”, we suggest 56% of gross income from the front end and 44% from the back end.

Back End (Orientation)

Calculation: Parts + Service Department Contribution to Gross Profit

What does it measure: A measure of orientation that indicates whether the dealership is back end driven.

Why is it important: Back end orientated dealerships are not as subject to the volatility of market conditions. However, it is important for a dealership to manage the front end as vehicle sales drive the back end in the long run. For a “well balanced dealership”, we suggest 56% of gross income from the front end and 44% from the back end.

Gross % Sales (New, Used, Parts, Service)

Calculation: Department Gross Profit1 ÷ Department Sales

What does it measure: Each department's gross margin - a ratio of gross profit to department sales. Note, this KPI does not reflect the impact of selling expenses of the department (see Selling Gross % Gross under each department).

Why is it important: Reflects the proportion of each dollar of sales revenue that the department retains as gross profit. This KPI should remain stable over time.

Net Profit per Employee

Calculation: Total Net Profit ÷ Total Number of Employees

What does it measure: The average net profit generated per employee per month.

Why is it important: See Gross Profit per Employee.

Sales per Employee

Calculation: Total Dealership Sales ÷ Total Number of Employees

What does it measure: The average sales generated per employee per month.

Why is it important: See Gross Profit per Employee.

Gross Profit per Employee

Calculation: Total Dealership Gross Profit ÷ Total Number of Employees

What does it measure: The average gross profit generated per employee per month.

Why is it important: A comparison of net profit, sales and gross proft per employee over time may indicate where the strengths of your dealership staff lie. Examples include:

a) A high sales per employee figure but a low gross profit per employee figure: this may indicate that a dealership is able to manage volume of customers, but are not maintaining a strong margin

b) High sales and gross profit per employee figures but low net profit per employee: this may indicate that a dealership should focus on lowering costs


1 New Vehicle Department Gross will include aftermarket, holdback, incentives and loads. Used Vehicle Department Gross excludes wholesale gross profit but includes aftermarket and loads.