Common Business Ratio Formulas

Looking for a Common Business Formula

We've compiled this handy list for our clients.  Because we combine deep analytical skills with digital marketing, our clients frequently find they need to define their KPIs much more methodically.  This list is used by our team to help in that process.  

Metric Name Common Formula
   
Income Revenue - Expenses 
ROI (Return On Investment) (Net Profit / Investment) * 100
COGS (Cost of Goods Sold) Beginning Inventory  + New Purchases - Ending Inventory 
Gross Margin Sales - The "Direct" Cost of the Goods or Services Sold 
Contribution Margin P-V (Price Per Product - Variable Cost Per Product) 
Contribution Margin Ratio (Total Revenue - Variable Cost) / Total Revenue
Profit Margin Net Income/Sales
Operating Profit Profit before subtracting EBIT
Net Profit Profits - (Operating Expenses-COGS-Interest-Tax) 
ROA (Return on Assets) Profit Margin x Asset Turnover
ROE (Return on Equity) Return on Assets X Financial Leverage
Asset Turnover Sales/Total Assets
EVA (Economic Value Added)

ANOPAT* - Cost of Capital % X (Adjusted Total Assets - Current Liabilities)

*ANOPAT  means the Adjusted Net Operating Profit After Taxes

Required Return on an Equity Investment

Risk-Free Rate of Return + (Avg. Market Return Rate - Risk-Free Rate) X Beta

Value of a Perpetuity

Payment Required to be Received Forever / Required Rate of Return

Dividend Growth Model (Simplified) using Value Per Share approach.

D/(K-g)

 

D = Annual Dividends per Share

K = Discount Rate or Required Rate of Return

g = Annual Dividend Growth Rate

Profitability Index

NPV of Future Cash Flows/Initial Investment

After Tax Cost of Borrowing

Borrowing Rate x (1 - Tax Rate)

Weighted Average Cost of Capital (WACC)

[Kd(1-t)(Market Value of Debt)/Total Debt and Equity ]+ [Ke(Market Value of Equity)/Total Debt and Equity]

 

t = tax rate

Kd = cost of debt

Ke = cost of equity

Dividend Yield

Annual Dividend / Market Price Per Share

Dividend Payout Ratio

Annual Dividend / Net Income

Terminal Value

Terminal Cash Flow / (Discount Factor* - Growth)

 

*Discount Factor = WACC 

Capital Asset Pricing Model (CAPM)

Ke = Rf + (Km - Rf)Beta

Rt = Risk Free Treasury Rate

Km - Rt = Risk Premium

Quick Ratio

or 

Acid Test

Liquid Assets/Quick Liabilities

or

Cash and Cash Equivalent + Marketable Securities + Accounts Receivable/Current Liabilities

 

The Dupont Model Chart

 

Profit Margin   Asset Turnover   Return on Assets (ROA)
         
Net Income X Sales = Net Income
Sales   Total Assets   Total Assets
         
Return on Assets   Financial Leverage   Return on Equity (ROE)
         
Net Income X Total Assets = Net Income
Total Assets   Owners Equity   Owners Equity
         

 

Additional Key Performance Indicators (KPIs) 

 

Profitability Ratios

How profitable is a company in relation to the assets and the sales that made its profits possible?

Metric Name Common Formula
   
ROS (Return on Sales) Net Income / Sales
ROE (Return on Equity) Net Income / Owners' Equity

 

Activity Ratios 

How actively are the firms assets being deployed?  

Metric Name Common Formula
   
Assets Turnover Per Period Sales / Total Assets
Inventory Turns Per Period Cost of Goods Sold / Average Inventory Held During the Period
Days Sales in Inventory Ending Inventory / (COGS / 365 )
   

 

Liquidity Ratios

How much is on hand that can be converted to cash to pay the bills?

Metric Name Common Formula
   
Current Ratio Current Assets / Current Liabilities
   

 

Capitalization Ratios

Is a company heavily burdened with debt?  Are its investors financing the company? How is the company funding itself?

Metric Name Common Formula
   
Financial Leverage (Total Liabilities + Owners' Equity) / OE
Long-term Debt to Capital Long-term Debt / (Liabilities + OE)

 

Sales and Volume Variances 

 

There are two basic types of variances, price and volume variances.

 

Metric Name Common Formula
   
Sales Price Variance (Actual Sales Price - Standard Sales Price) x (Actual Quantity Sold)
Sales Volume Variance (Standard Sales Price) X (Actual Quantity Sold - Standard Quantity Sold)

 

Purchase Price, Efficiency and Volume Variances

 

Using the two basic sales price and volume formulas, you can also compute variances useful for management control.

 

Metric Name Common Formula
   
Purchase Price Variance (Standard Price - Actual Price) X (Actual Quantity Purchased or Used)
Material or Labor Efficiency Variance (Standard Use Quantity - Actual Usage Quantity) X (Standard Cost of Material or Labor)
   

 

Rules for Entries Into Accounts

 

You may know these as T Accounts.  In virtually every SAP module, your actions will cause a financial transaction that will hit your T Accounts following these rules.

 

               
               
          Liability Accounts  
  Asset Accounts     Debit Increase Credit Increase  
  Debit Increase Credit Increase          
        Owner's Equity Account
          Debit Increase Credit Increase  
               
               

 

Fundamental Accounting Equation

 

Metric Common Formula
   
Assets Liabilities + Owner's Equity
CA+NCA CL+ NCL + OE
CL +NCL + OE  (Cash + Accounts Receivable (AR) + Inventory (INV) + NCA

 

Liquidity Measures

Working Capital

Metric Common Formula
   
Net Working Capital Current Assets - Current Liabilities

 

Common Marketing and Sales Metrics

There are numerous KPIs that you should know and use within your marketing and sales operations.  We've listed what we consider the key ones here which also happen to be available via SAP reporting (but they may require tweaking for your requirements).

 

Metric Common Formula
   
Percent Markup on Selling Price (SP) ($ Markup / $ Selling Price) X 100
Preceding Distribution Level's Selling Price Selling Price X (1 - Markup %)
Total Costs Variable Costs Per Unit (VC) X Units Sold + Fixed Cost (FC)
Unit Contribution Selling Price - Variable Costs
Break Even Unit Volume Fixed Costs / Unit Contribution
Target Volume (Fixed Costs + Profit) / Unit Contribution
Payback Period on Initial Investment Initial Investment / Annual Profit

 

Common Quantitative Statistics

These are just some of the many statistics you may need to derive from the data within your ERP system.

 

Metric Common Formula
   
Expected Monetary Value (EMV)

($ *. 90) + ($ * .19) = EMV*

*Useful in Decision Trees

Future Value of a $ in x Periods

($ today) x (1 + Reinvestment Rate)Number of Periods

Net Present Value (NPV)

($ in Future) x (1 + Discount Rate)-Number of Periods

Internal Rate of Return (IRR)

0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . . . +Pn/(1+IRR)n

 

where P0, P1, . . . Pn equals the cash flows in periods 1, 2, . . . n, respectively; and
IRR equals the project's IRR

Z Value

[(Point of Interest) - Mean] / SD*

*Standard Deviation

Binomial Distribution

r = number of successes

n = number of trials

p = probability of success.

Please refer to a binomial distribution table.

Statistical Functions You Should Know But Use Excel to Solve

Within SAP QM (Quality Management), it is also possible to compute these functions.

Normal Distribution The bell-shaped probability distribution of all possible outcomes.
Probability Mass Function  A graph or table that shows the distribution of outcomes.
Probability Density Function If there are many possible outcomes, the curve is smooth
Standard Distribution (SD)

1 = .3413

2 = .4772

3 = .49865

4 = .4999683

Cumulative Distribution Function (CDF)

A form of the normal distribution that shows the probability of being less than or equal to all possible outcomes

Regression A mathematical method of forecasting using line equations to explain the relationships between multiple causes and effects.
R Squared What percent of the variation in the data is explained by the regression equation given. 
T Statistic Can be used to determine if the regression equation calculated by a spreadsheet or SAP is a good one to use for forecasting.

 

Common Operations Statistics and Formulas

These are some key concepts and are here because you can determine most if not all from SAP reports.  There are many, many more to know.

 

Metric Common Formula
Linear Equation (Simplified) (X Model x $500) + (Y Standard Model x $300) = Total Profit

Queuing Questions

A = Average number of random arrivals per unit of time

S = Average number of services provided per channel per unit of time

M = Number of available channels

  • Utilization factor of the System = A/MS

  • Average Number Waiting = Total Number in Line - (A/S)

  • Expected Waiting Time in Line = Average # Waiting / A

Economic Order Quantity (EOQ)

EOQ = Optimal inventory order Quantity

R = Annual unit requirements (Demand)

O = Cost of placing an order

C = Cost of carrying a unit of inventory per period

Square Root √(2 X R X O / C)

Quality Terms You Should Know

Common Cause Systemic problems shared by many workers, machines or product types.
Special Causes Problems related to specific workers, machines or material shipments

Upper Control Limits (UCL)

A measurement of how the process is actually performing as opposed to a specification limit.  Typically within 3 standard deviations above or below the Median.

The upper limit of the process.  

Lower Control Limits (LCL)

A measurement of how the process is actually performing as opposed to a specification limit.  Typically within 3 standard deviations above or below the median.

The lower limit of the process.

X Bar Control Chart

Shows any tendency of a process or machine to drift or jump over time.

R (Range Chart) Control Chart

Shows any tendency of a process to behave more or less randomly over time.

Learning Curve

Many learning curves exist.

Cost Per Unit X Curve

Unit 1              = $10       

$10 x .8

Unit 2,097,152 = $.09      $10 x  (.8)21

 

Economic Formulas

These are much more difficult to determine (but not impossible) using SAP.

Metric Common Formulas
   
Elasticity of Quantity Demanded % Percent Change in Quantity Demanded  / % Percent Change in Price
Elasticity of Total Revenue % Change in Total Revenue / % Percent Change in Price

Gross National Product (GNP)

C = Personal Consumption

I = Private Investment

G = Government Purchases

X = Net of Exports over Imports

C + I + G + X

Spending Multiplier

MPC = Marginal Propensity to Consume

1 / (1 - MPC)

Nominal GNP

M X V = P X Q

Money x Velocity =Price Level x Real GNP

Money Supply = Nominal GNP

 

Lifetime Value to Customer Acquisition Cost (LTV:CAC) Ratio

In general, a ratio of less than 3 is considered unsustainable.

Metric Common Formula
LTV:CAC

CAC (Cost to Acquire a Customer)

MRR1 Per Customer

Churn Rate %

Margin %

LTV = MRR/(Churn Rate X Margin)

LTV:CAC = LTV/CAC

1 Monthly Recurring Revenue

 

Common Operational KPIs

 

Metric Common Formula or Meaning
% Annual Average Savings (Direct) Total Discounts Available as a % of Total Direct Material Purchased when Purchases are Under Blanket.
% Annual Average Savings (Services) Percent Discount Received on Compliant Services  (i.e., Labor hours/services such as temporary labor and consulting) Purchased.
% Services Spend Under Contract Percent of Total Services Controllable Spend Currently under Contract.
% of Direct Materials Spend Under Contract Percent of Direct Materials Controllable Spend currently Under Contract.
% of Maverick Spend (Direct) Maverick Spend: Procurement Spend  (Direct) under Contract but circumvented by employees (%).
% of Maverick Spend (Services) Maverick Spend: Procurement Spend  (Indirect) under Contract but circumvented by employees (%).
% of Spend Managed Strategically (Direct) Percent of Total Direct Materials Controllable Spend that is Managed Strategically. Spend is considered to be managed strategically when there is a regular process in place to analyze the spend category, aggregate the spend across regions/divisions, identify suppliers, and execute a supplier evaluation process.
% of Spend Managed Strategically (Services) Percent of Total Services Spend currently Managed Strategically. Spend is considered to be managed strategically when there is a regular process in place to analyze the spend category, aggregate the spend across regions/divisions, identify suppliers, and execute a supplier evaluation process.
Accounts Receivable Balance Total Accounts Receivable Balance as shown on the balance sheet
Aftermarket Service Operating Profit (%) Aftermarket Service Operating Profit as a Percent of total Aftermarket Service Revenue
Aftermarket Service Revenue as % of Total Revenue Aftermarket Service Revenue as % of Total Revenue
Annual Revenue Loss due to Stock-outs Total Annual Estimated Revenue Loss Attributable to Stock-outs
Cost of Goods Sold (% of Revenue) Cost of Goods Sold (COGS) expressed as a Percent of Total Revenue. If COGS was provided in $, please divide that amount by Total (Annual) Revenue to get COGS as a % of Revenue
Customer Satisfaction (in %) Current Customer Satisfaction (in %). Customer satisfaction is a sum total of "Very Satisfied" customer and "Satisfied" customer.
Days Sales Outstanding (DSO) A measure of the average number of days that a company takes to collect revenue after a sale has been made. It can be calculated as (365*Account receivable/Revenue)
Direct Materials Controllable Spend ($) Total Annual Controllable Direct Materials Spend. This number represents total direct materials spend less uncontrollable (i.e., Spend which cannot be sourced strategically such as taxes and electricity) direct material spend
Inventory Carrying Cost (% Inventory at Cost) Inventory Carrying Cost expressed as a Percent of Total/Average Inventory at Cost
Inventory Carrying Cost (% of Revenue) Inventory Carrying Cost as a percent of Total Revenue.
Operating Profit Margin (%) Operating Pre-Tax Operating Margin, or Contribution Margin (%). If Operating Income was provided in $, divide that amount by Total Revenue to get Operating Profit Margin
Project Based Annual Revenue Project Based Annual Revenue
Services Controllable Spend ($) Total Annual Controllable Services Spend ($), is the difference between Total Annual Services Purchased and Uncontrollable (Spend which cannot be sourced strategically such as taxes and electricity) Services Purchased
Total Inventory Total Inventory including Raw Materials, Work-in-Progress and Finished Goods from the Annual Filings.
Total Revenue Total Annual Products and Services Revenues (Commercial Sector) or Total Budget (Public Sector)
Total Transportation Spend Total Annual Transportation Spend
Weighted Average Cost of Capital (WACC) WACC: Weighted Average Cost of Capital (%). This represents the cost (i.e. debt and equity), in %, to raise an incremental unit of capital to fund investment projects while maintaining an optimal capital structure (i.e. mix of debt and equity)
   
Enterprise Performance Management (EPM)  
% Annual Average Savings (Indirect) Annual Savings Potential, as a Percent of Total Indirect Materials Purchased, achieved for Compliant (i.e. Non-Maverick) Indirect Materials Spend.
% of Indirect Materials Spend Under Contract Percent of Total Indirect Materials Controllable Spend Currently under Contract. If this data is not available, please use 38.94% (average across all industries) as default for this metric based on the SAP Procurement/SRM Benchmarking Survey, September 2008
% of Low Margin Revenue that can be Upgraded Percent of Low Margin Revenue that can be Upgraded
% of Maverick Spend (Indirect) Maverick Spend: Procurement Spend  (Indirect) under Contract but circumvented by employees (%).
% of Spend Managed Strategically (Indirect) Percent of Total Indirect Materials Controllable Spend currently Managed Strategically. Spend is considered to be managed strategically when there is a regular process in place to analyze the spend category, aggregate the spend across regions/divisions, identify suppliers, and execute a supplier evaluation process.
% of Total Revenue that is Low Margin Percent of Total Revenue that is Low Margin (i.e., below target margin)
ANN Supply Chain Mgt Compliance Fines & Penalties Total Annual Supply Chain Management Compliance Fines and Penalties.
AVG Short & Med Term Interest Rate on Bank Loans Average Annual Interest Rate Incurred for Short and Medium Term Bank/External Loans used to Finance the Cash-To-Cash Cycle (i.e. Working Capital Cycle) If this data is not readily available, please use 5% o 10% as default for this metric based on market research (2009)
Annual Cost of Order Expediting Total Annual Cost incurred due to Order Expediting
Annual Cost of SCM Customer Service Total Annual Customer Service Cost
Annual Warehousing Costs Total Annual Warehousing Costs
Gross Profit Margin Target/Normal Average Gross Profit Target/Normal Margin as a % of Sales.
Gross Profit Margin from Unprofitable Revenue Average Gross Profit Margin (%) from Unprofitable Revenue/Customers
Indirect Materials Controllable Spend ($) Total Annual Indirect Materials Controllable Spend ($), is the difference between Total Annual Indirect Materials (i.e., Materials for non-production goods or services such as office supplies, MRO - maintenance, repair and operations-, travel, and PCs) Spend and Uncontrollable (i.e., Spend which cannot be sourced strategically such as taxes and electricity) Indirect Materials Spend
Lost Sales % due to Poor Planning/Execution Avg Loss of sale due to Poor Planning /Execution as % of Revenue. If this data is not readily available, please use 8% as default value for this metric, based on SAP Customer experience.
Retail Metrics (The Gourmet Retailer, Nov 30, 2008 "How to DIY...Inventory Management")
Lost Sales Due to OSS
Average Retailer:  3.7%
Specialty Soft Goods:  7.1%
Dept Stores:  4.2%
Grocery:  1.5%
Other Supply Chain Planning Costs Other Supply Chain Planning Costs include primarily corporate allocations for HR, Finance, Marketing, & other company overhead
Revenue Lost due Poor Planning/Exec % of Revenue Loss of Revenue Due to Poor Planning/Execution as a Percent of Total Revenue. If this data is not readily, available, please use 3% to 5% based on SAP customer experience
Short & Medium Term Loan Balance Total Amount of Short-Term and Medium Term Bank Loans/External Financing used to support Cash-to-Cash/Working Capital Needs
Supply Chain Planning External Spend Total Annual Supply Chain Planning External Spend (e.g., Contractors, Consulting, Expenses paid to third parties...)
Supply Chain Planning Headcount Costs Total Annual Supply Chain Planning Headcount Costs. Please include headcount costs for the following categories: Sales and Operations Planning,Demand Planning, Forecasting and Inventory (Safety-stock) Optimization,  Supply and Distribution Planning, Production Planning/ Scheduling and Transportation Planning/ Vehicle Scheduling, and  Order Promising
Supply Chain Planning Technology Costs Supply Chain Planning Technology Costs should exclude dedicated IT staff that are part of SCP headcount costs
   
Finance  
% Discount Lost from Suppliers Estimated total discount as a % of purchases from suppliers that is not taken advantage of.
% of Receivables Overdue Percent of Total Accounts Receivable Balance that is Overdue/past due.
Accounts Payable Balance Accounts Payable Balance
Annual Purchase Amount Eligible for Discount Total annual value of purchases qualifying for discounts from suppliers
Estimated List Price Improvement Estimated List Price Improvement
Increase in Pocket Margin From Reduced Over-Disc. Potential correct increase in pocket margin from reduced over-discounting
Pct Pricing Staff Time Spent on Automatable Tasks Percent of Price Management employees’ time spent pulling reports, manipulating data in spreadsheets, formatting charts, debating figures with sales personnel, keying negotiated or list prices into execution systems, reconciling two or more versions of data, dealing with invoice disputes, etc. Pct pricing staff time spent on automatable tasks
Percentage of Revenue Currently Fulfilled at Target Percentage of revenue currently fulfilled at target margins
Price Management FTEs Price Management FTEs
Price Management Fully Loaded Cost per FTE Price Management Fully Loaded Cost per FTE
Revenue Likely Impacted by Higher Margins Revenue Likely Impacted by Higher Margins. If this data is not readily available, please use 10% as value for this metric based on SAP Customer Experience
Trading Revenue ($) Total Annual Trading Revenue ($)
   
Governance, Risk & Compliance (GRC)  
% Employees to Consultants (Internal Compliance) Estimated Percent of Employees vs. Consultants Working on Compliance-Related Activities
% of Direct Material Cost from Imports % of Direct Material Cost from Imports. If this data is not readily available, please use 50% as an assumption based on SAP Customer Experience
% of Manual Controls that can be Automated % of Manual Controls that can be Automated
% of Shipments Delayed Annually due to Customs % of Shipments Delayed Annually due to Customs. If this data is not readily available, please use 10% as an assumption based on SAP Customer Experience
AVG Hourly Cost Per External Consultant (Compl) Average Hourly Cost per External  Contractor/Consultant for Compliance-Related Activities
AVG Hourly Cost per FTE AVG Hourly Cost per FTE. If this data is not readily available, please use $25 as an assumption based on SAP Customer Experience
Annual Export Revenue Revenue which is contributed through Customers outside US. This data is normally available in Annual Fillings of a company. This is usually 35% of the Total Revenue, based on SAP Customer Experience
Average Days Delayed in Customs Average Days Delayed in Customs. If this data is not readily available, please use 10 days as an assumption based on SAP Experience
Daily Demurrage Fees per $1M Worth of Goods Daily Demurrage Fees. If this data is not readily available please use $125 as an assumption based on SAP Customer Experience
Direct Material Costs as % of COGS Total Direct Material Costs as a Percent of Cost of Goods Sold. If this data is not readily available, please use 70% as an assumption based on SAP Customer Experience
Number of Manual  BP Controls Total Number of Business Process Controls that are currently Manual
Penalty Fine Penalty Fine
Time Spent per Automated Control (in Hours) Time Spent per Automated Control (in Hours)
Total Annual Trade Penalties Total Amount of Trade Penalties and Fines incurred in the last 12 months
Workdays per Year Total Number of Workdays Per Year. Most companies use 220 - 260 days per year based on SAP experience
   
Order-to-Cash  
% Errors in Sales Quotes % Errors in Sales Quotes. If this data is not readily available, please use 2.4 (Average across all industries) or 2.0 (Q1 across all industries) based on SAP SE benchmarking survey.
% of AR Balance Involved in Dispute Percent of Total Account Receivable Balance tied to Disputes
% of Errors in Invoices Sent Out Estimated percent of total bills/invoices sent out that have errors and need adjustments
% of Invoices with Unauthorized Deductions Percent of Total Invoices with Unauthorized Deductions
AVG Cost to Fix a Sales Quotation Errors Average Cost Incurred to Fix a Sales Quote Error/Mistake
Accounts Payable Avg. Fully Loaded Cost per FTE Accounts Payable Avg. Fully Loaded Cost per FTE
Average Number of Workhours per Employee per Year Average number of workhours per employee and per year. If this data is not readily available, you can use 1,920 hours per year (240 working days and 8 hours per day) to estimate this metric
Backordered Orders Cancelled by Customer (in %) Percentage of backordered orders that got cancelled.
Effort (hours) to Correct an Invoice with Errors Time required to correct errors on an erroneous invoice
Expedited Outbound Transportation Expense Additional freight costs associated with expediting orders to meet committed delivery dates.
Invoices with Short Pays (in %) Invoices with Short Pays (in %).
Lost Orders (in %) Percentage of orders that were cancelled due to delays. This is only MTO/ ETO/ CTO type orders.
Number of Customer Complaints  (Annual) Total Number of Customer Complaints Annually
Number of Invoices Generated Annually Number of Invoices Generated Annually
Number of Order Line Item Returns (Annual) Total Annual Number of Order Line Item Returns
On-Time Delivery Performance (MTS) (%) On-Time Delivery Performance (MTS) (%). The percentage of orders that are fulfilled on or before the customer's requested date. Delivery measurements are based on the date a complete order is shipped or the ship-to date of a complete order. A complete order has all items on the order delivered in the quantities requested. An order must be complete to be considered fulfilled.
Order Fill Accuracy (MTS) (%) Order accuracy metric measures the percentage of orders that were complete as per order specification, damage-free and accurate documentation.
Order Receipt to Release Cycle Time (MTO) (days) Order Receipt to Release Cycle Time (MTO) (days).
Order Receipt to Release Cycle Time (MTS) (days) Order Receipt to Release Cycle Time (MTS) (days).
Order to Invoice Days Time in days between when an order is created and an invoice is generated and sent to the customer.
If this data is not readily available, please use 45 days (average value) as default  for this metric based on the SAP Automotive Experience
Orders Backordered (in %) Percentage of orders that were not ready in stock, and had to be backordered (full/ partial).
Quote Conversion Rate (in %) Percentage of quotes that are converted to a sales order.
Quote Request to Delivery Cycle Time (MTO) (days) Quote Request to Delivery Cycle Time (MTO) (days).
Quote Request to Delivery Cycle Time(MTS) (days) Quote Request to Delivery Cycle Time (MTS) (in days). Time taken in days for sending out a quotation against a request. All activities related to quotation creation (pricing, special terms & conditions etc.) will be carried out in this time.
Time to Resolve an Order Related Dispute (days) Average Time required to Resolve an Order Related Dispute (in days)
Time to Resolve an Order Related Dispute(in days) Time to Resolve an Order Related Dispute(in days).
Total # of Sales Quotes Processed Total Number of Sales Quotes Processed Annually.
Total Number of Orders Total Number of Orders
Total Warehouse Management Costs Total Annual Warehouse Management Costs
Uncollectible Accounts Receivable Write-offs($) Total Uncollectible A/R that written-off as losses/bad debt
Unfulfilled Orders (% of Revenue) Unfulfilled Orders (% of Revenue). If this data is not readily available, please use 1% - 2% as an assumption based on SAP Customer experience
Unfulfilled orders lost (%) If no data is available please use 50% as unfulfilled orders lost as per SAP customer experience
   
PMNGT - Integrate planning, scheduling and costing  
% Budget Overrun for Projects Average % Budget overrun for projects that go over-budget. If no data is readily available, please use 10% as an assumption.
% Projects Over Budget Percent of Total Projects that are Over Budget. If no data is readily available, please use 10% as an assumption.
% of Projects under Contracts % of Projects that are under contracts. If no data is available, use 70% as an assumption.
Average Project Delay (Months) Average Delay, in Months, for a Project that is delayed
New Projects Revenue as % of Project Based Rev. New Projects Revenue as % of Project Based Rev. If this data is not readily available, please use 5% - 10% as an assumption.
   
PMNGT - Optimize project delivery  
# Missed Sales Projects as a % of Total Projects Number of Missed Sales Projects as a Percent of Completed Projects. If this data is not readily available, use 2.5% as default based on SAP customer experience
Expected Revenue Growth (in %) Expected Revenue Growth (in %)
Overall Percentage (%) Employee Satisfaction Rate Overall Percentage (%) Employee Satisfaction Rate
   
PMNGT - Standardize project management process across enterprise  
% of Rev Lost due to Incorrect change Order Proc. Revenue lost due to incorrect change order processing. If no data is available, use 1% as an assumption.
   
Procurement  
Annual Spend as a % of Revenue Total Annual Spend as a Percent of Revenue. If this data is not readily available, please use 45.3% (average across all industries) as an assumption for this metric based on the SAP Customer experience.
Cycle Time for New Contract Creation (in weeks) Cycle time for developing and implementing a new supplier contract (in weeks).
Orders Requiring Expediting (in %) Orders Requiring Expediting (in %).
PO Error Rate Purchase Error Rate: Number of Erroneous PO's/Total PO's Processed Annually.
Procurement Average Fully Loaded Cost per FTE Total Annual Fully Loaded Cost (e.g., Salary + Benefits + Bonus...) per Procurement FTE. If this data is not readily available, please use $70K as default for this metric based on the SAP Procurement/SRM Benchmarking Survey, September 2008
Procurement FTE % Time - Transactional % of Time Allocated by Procurement/SRM FTEs to  Transactional (Requisitioning, Order Processing, Material Receipt, Financial Settlement, Supplier Data Management, Supplier Enablement) Activities.
Procurement FTEs per $B of Spend Total Number of Procurement FTEs per $Billion in Spend.
   
Sales, Marketing & Customer Service  
# of CS Interaction Center Calls Handled per Year Total Number of Customer Service Calls Handled by the Customer Interaction Center(s)
% of Leads Qualified % of Leads Qualified. If this data is not readily available, please use 61.1 (Average across all industries) or 85.0 (Q1 across all industries) based on SAP SE benchmarking survey.
% of Qualified Leads Closed Annually % of Qualified Leads Closed Annually.
% of Revenue from New Opportunities Revenue from New Opportunities expressed as a % of Total Revenue
% of Total Revenue at Risk (Customer Defection) Percent of Total Annual Revenue at Risk due to Customer Defection/Attrition. To estimate this number use the following: Total Annual Revenue Lost due to Customer Defection/Attrition divided by Total Annual Revenue
Annual Revenue from New Customers Total Annual Revenue (Products and Services) from New Customers
CS Interaction Center AVG Fully Loaded Cost/FTE Total Annual Fully Loaded Cost (e.g., Salary + Benefits + Bonus...) per Customer Service Interaction Center Call Handling FTE
CS Interaction Center Call Handling FTEs Total Number of FTEs Handling Calls in the Customer Interaction Center
Cross-Sell/Up-Sell Revenue % of Total Revenue Total Annual Cross-Sell/Up-Sell Revenue as a Percent of Total Revenue. If this data is not readily available, please use 10% as an assumption based on SAP Customer Experience
Current Pipeline as a % of Revenue Current Pipeline/Sales Funnel/Opportunities as a Percent of Total Revenue. If this data is not available, please use 130% as default based on SAP/Business Objects customer experience.
Current Sales Close Rate (%) Current Sales Opportunity Close Rate (%). If this data is not available, please use 20% as default based on SAP/Business Objects customer experience.
Customer Churn Rate (in %) Customer Churn Rate (in %) is % of customers lost to competition this financial year.
Lead Conversion Rate (Sales) in % Percent of all Leads that actually result in a Sale
Number of New Leads per Representative per Year Number of New Leads per Representative per Year. If this data is not readily available, please use 86.7  (Average across all industries) or 121.3 (Q1 across all industries) based on SAP SE benchmarking survey.
Quote Cycle Time (Days) Number of days required to generate/create a quote for a customer
Sales Productivity Sales Productivity
   
Supply Chain Management  
% Error in Lines Shipped % Error in Lines Shipped.
% Freight Invoices that are Duplicated % Freight Invoices that are Duplicated.
% Freight Invoices with Erroneous Charges % of Freight Invoices with Erroneous Accessorial Charges.
% Inbound Shipments with ASN (Adv. Shipment Notification) % of inbound shipments with an Advanced Shipment Notification (ASN).
Annual Demurrage Costs Total Annual Demurrage Costs
Annual Demurrage Expenses Annual Demurrage, Penalty & Fine Related Expenses.
Average Shipment Status Cycle Time (Min) Average cycle time to provide shipment status (in minutes).
Average Trailer Turn (in minutes) Average Trailer Turn (in minutes).
Demand Forecast Accuracy  (%) Demand Forecast Accuracy expressed in %.
Demand Planning, Forecasting & Inventory Opt FTEs total Number of Demand Planning, Forecasting and Inventory (Safety-stock) Optimization FTEs
Dock to Stock Cycle Time (in hours) Dock to Stock Cycle Time (in hours). If this data is not readily available, please use 13.2 (Average across all industries) or 1.4 (Q1 across all industries) based on SAP benchmarking survey.
Finished Goods Inventory Total Value of Finished Goods Inventory ($)
Inventory Accuracy Rate (in %) Inventory Accuracy Rate (in %). If this data is not readily available, please use 95.5 (Average across all industries) or 99.5 (Q1 across all industries) based on SAP benchmarking survey.
Inventory Obsolescence Cost (% of revenue) Inventory Obsolescence Cost (% of revenue).
Inventory Turns per Year Inventory Turns per Year.
Inventory Write-offs (due to damages/shrinkage) Total Annual Amount of Inventory Write-offs (primarily due to damages/shrinkage).
Number of Shipping Complaints per Month Number of Shipping Complaints per Month.
Number of Warehouse Number of Warehouse
On-Time Delivery Performance (in %) Percent of Orders Delivered On-Time to the Customer Request Date.
Operate Warehouse External Cost Operate Warehouse External Cost.
Order Fill Rate (in %) Order Fill Rate (in %).
Order Line Fill Rate (in %) Order Line Fill Rate (in %).
Order Pick Accuracy Rate (in %) Order Pick Accuracy Rate (in %).
Order Promising Average Fully Loaded Cost per FTE Total Annual Fully Loaded Cost (Salary + Benefits + Bonus...) per Order Promising FTE
Order Promising FTEs Total Number of FTEs in Order Promising
Order to Ship Cycle Time (for MTS) (in days) Order to Ship Cycle time (for MTS) (in days).
Orders Expedited (% of orders shipped) Orders Expedited (% of orders shipped).
Orders Shipped on Time (% of orders shipped) Orders Shipped on Time (% of orders shipped).
Other Warehousing Cost Other Warehousing Cost.
Pick-to-Ship Cycle Time (in Hours) Pick-to-Ship Cycle Time (in Hours).
Prod Planning/Sched & Transp AVG Loaded Cost/FTE Total Annual Fully Loaded Cost (e.g., Salary + Benefits + Bonus...) per Production Planning/ Scheduling and Transportation Planning/Vehicle Scheduling FTE
Production Planning/Scheduling & Transport FTEs Total Number of Production Planning/ Scheduling and Transportation Planning/ Vehicle Scheduling FTEs
Raw Materials Inventory ($) Total Average Value of Raw Material Inventory ($)
Safety Stock as a % of RM and FG Inventory Safety Stock (Buffer Inventory) as a Percent of Raw Materials and Finished Goods Inventory
Sales and Operations Planning FTEs Total Number of FTEs supporting Sales and Operations Planning
Stock Outs (% of sales order line items) Stock Outs (% of sales order line items).
Supply and Distribution Planning FTEs Total Number of FTEs in Supply and Distribution Planning
Total Warehouse Inventory Total Warehouse Inventory. This included raw material, WIP and Finished goods inventory in a particular warehouse.
Trailer Utilization (%) Trailer Utilization (%).
Warehouse Analytics External Cost Warehouse Analytics External Cost.
Warehouse Strategy External Cost Warehouse Strategy External Cost
Warehousing Inbound Process External Cost Warehousing Inbound Process External Cost.
Warehousing Outbound Process External Cost Warehousing Outbound Process External Cost.
GMROI Gross Margin/Average Inventory at Cost

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