1. What is Profit on Turnover?

Profit on Turnover (also known as Profit Margin) is a financial metric that shows what percentage of sales has turned into profit. In Australia, it's commonly used by businesses to assess their financial performance and compare against industry benchmarks.

2. How Does the Calculator Work?

The calculator uses the profit percentage formula:

Where:

• \( \text{Profit} \) — Net profit in Australian dollars (AUD)
• \( \text{Sales} \) — Total sales revenue in Australian dollars (AUD)

Explanation: The formula calculates what portion of each dollar of sales represents profit after all expenses are deducted.

3. Importance of Profit Percentage

Details: Profit percentage helps Australian businesses understand their operational efficiency, pricing strategies, and cost management. It's crucial for financial planning, securing loans, and attracting investors.

4. Using the Calculator

Tips: Enter your profit and sales figures in AUD. Both values should be positive numbers, with sales greater than zero for a meaningful calculation.

5. Frequently Asked Questions (FAQ)

Q1: What's a good profit percentage in Australia?
A: This varies by industry. Retail might average 2-5%, while professional services could be 15-25%. Compare with your industry benchmarks.

Q2: Should I use gross or net profit?
A: Typically net profit (after all expenses) is used, but you can calculate both gross and net profit margins for different insights.

Q3: How often should I calculate profit percentage?
A: Monthly calculation is common for Australian businesses, with quarterly and annual reviews for trend analysis.

Q4: What if my profit percentage is negative?
A: This means your business is operating at a loss. Consult with an Australian financial advisor to address this situation.

Q5: How does GST affect this calculation?
A: For Australian businesses, typically use GST-exclusive figures for both profit and sales to get the most accurate profit percentage.