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Emergency Order %

Purchases on E.O. ÷ Total Purchases (x100)

Benchmark: < 30% of purchases

Description:

E.O. is an abbreviation for Emergency Order. E.O. sales occur when a vehicle is being repaired in the workshop and the parts that are required to repair it are not currently held within your parts stock.

In this instance, the required parts are ordered from your franchise manufacturer on an emergency basis and the parts are usually delivered the next day.

This KPI measures the percentage of your parts purchases that have been ordered on an emergency basis.

Example:

A) Purchases on E.O. = R17,977
B) Total parts purchases = R79,894
C) E.O. % = 22.5% (A ÷ B X 100)

Discussion:

In most cases, parts that are ordered on E.O carry a financial penalty, which reduces your overall Buying Margin. therefore it is your interest to maintain a balance between your True Stock Turn and E.O.%

Related Terminology:

Equity %

Net Worth ÷ Total Liabilities (x100)

Benchmark: 35%

Description:

In simplistic terms this KPI tells you how much Equity you have in the business, or in other words, how much of the company belongs to the owners.

This statistic is used to measure the financial stability of a company and is sometimes used as a measure of the business's ability to borrow money.

Example:

A) Net Worth = R1,869,932
B) Total Liabilities = R5,342,663
C) Equity % = 35% (A ÷ B X 100)

Discussion:

If you own your home you will no doubt have heard the term Equity. Let's say that your house is worth R100,000 and you have a mortgage of R75,000. The remaining R25,000 represents the money that you put in to buy your house. This is the part of your house that belongs to you, or in other words this is your Equity.

To calculate your Equity % you simply divide your share (R25,000) by the total value of the house (R100,000) and express this as a percentage (x 100). In this example the Equity that you have in your house would be 25%.

The meaning of Equity in your business is exactly the same and you can find the components for the calculation on your Balance Sheet.

Related Terminology:

Estimate Conversion Ration

# of Jobs from Estimates ÷ # of Estimates (x100)

Baseline: > 80%

Description:

This KPI assesses how many jobs you have gained from the estimates that you have given.

Example:

A) # of jobs from estimates = 262
B) # of estimates given = 304
C) Estimates Conversion Ratio = 0.86:1 (A ÷ B)

More often than not, this KPI is referred to as a ratio, but in terms of reporting format it is usually displayed as a percentage.

The measurement is exactly the same the only difference is that you multiply the result by 100 to convert the ratio into a percentage. It's really a matter of preference.

Example:

A) # of jobs from estimates = 262
B) # of estimates given = 304
C) Estimates Conversion Ratio = 86% (A ÷ B X 100)

Discussion:

In simplistic terms these examples show that for every estimate that you have provided, you have successfully converted 86% of them into jobs for your business.

Related Terminology: