This financial indicator shows the dealership’s profitability before income tax, which is why it is referred to as EBT: Earnings Before Taxes. This indicator allows the dealership to determine whether the monthly result was positive or negative, taking into account the dealership’s sales, costs, and expenses.
The second level of this indicator shows the net result for each department. Net result refers to sales minus costs and expenses for each department. For example, the net result for New Vehicles (USD 680,302) corresponds to the net result obtained from new vehicle sales, after considering the costs of new vehicles and the expenses of the New Vehicle department.
“Other Income and Expenses” includes the remaining income statement accounts that do not belong to a specific department but are still part of the dealership’s total result.
At this second level, a monthly chart is displayed in the upper-right corner to show the trend in the dealership’s result.
Dashboard
Management
Departments
All
Frequency
Monthly
Goal
The EBT result target is defined by the dealership in its annual budget.
What happens if it is green?
The result target established in the annual budget was achieved.
What happens if it is red?
The projected profit target was not achieved. If the target is not met, all strategies related to the budgeted result should be reviewed.
Improvement strategies
- Identify which business unit is generating the lowest net result and try to determine where the issue lies. Are margins low? Are costs high? Are expenses excessive?
- Analyze expense allocations. This is an important point, as some departments may be absorbing expenses that do not fully belong to them.
- At the dealership level, after reviewing each department, if the result remains low, the analysis can continue by reviewing the composition of other items that do not directly affect the departments and are shown under Other Income and Expenses.
- Perform a comprehensive review of the composition of sales, costs, and expenses in each department.
Relationship with other indicators
This indicator is linked to Revenue indicators because, under normal conditions, an increase in revenue should translate into an increase in the company’s financial result and profit. If this does not happen when revenue increases, it may be because ROS is low and expenses are absorbing the revenue increase, preventing it from turning into profit.