Revenue Growth Rate is a great Key Performance Indicators (KPI) for measuring the rate that your business is growing in terms of sales. Revenue and sales are generally interchangeable terms. Revenue is usually the first item shown in the profit and loss statement.
As revenue is a profit and loss item, it is measured over a period of time, i.e., from 1 July 2016 to 30 June 2017.
Most of the businesses that we come across have some desire to improve and part of that is increasing their turnover. Increasing your turnover will not necessarily improve your business or increase your profitability but it can be a key factor.
Revenue Growth Rate is calculated as: (This year’s sales – last year’s sales) / last year’s sales
As with a lot of KPI the information is readily available in a business’s accounting data file. As long as the underlying transactions have been classified, posted correctly and consistently the results should be easily determined and reliable.
In order to monitor the above and make the most of them you will need:
1. Systems and processes in place.
2. Reliable and current data.
3. Clear goals.
4. Focused execution in achieving their goals.
If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com
Please refer to disclaimer at the bottom of the page.
<
