Direct Profit is calculated by taking Gross Profit minus Departmental Expenses. To make sense of this figure it is always expressed as a percentage of Turnover when used for trending as it is the direction of travel that is of most interest to you.
Example:
A) Direct Profit = R97,208 B) Departmental Turnover = R3,240,233 C) Direct Profit % = 3% (A ÷ B X 100)
Discussion:
Related Terminology:
The
Direct Profit of the Sales Department is also called many other things
such as, Departmental Profit, Operating Profit and of course the bottom
line.