# How do you measure customer profitability?

Category:
personal finance
financial planning

Divide the sales per

**customer**by total sales for each**customer's**contribution to revenue growth. This is an indirect, but more accurate**measure**of**profitability**as it does not take average costs into consideration. Subtract the average cost of each**customer**from each**customer**sales total.

Then, how do you determine profitability?

**Profitability Ratios Formula**

- Gross Profit Margin = (Gross Profit / Sales) * 100.
- Operating Profit Margin = (Operating Profit / Sales) * 100.
- Net Profit Margin = (Net Income / Sales)* 100.
- Return on Assets = (Net income / Assets)* 100.
- Return on Equity = Net Income / Shareholder's Equity.

**profitability report**is one of the key

**reports**in Productive. It shows your net profit in money and percentage (margin), among other useful information. The

**report**aggregates all of your project data, including not only revenues, but also costs that people incur when tracking time (salaries and overheads).

Moreover, how do you write a profitability analysis?

- Watch Out For…
- 2:1 2-to-1 2/1 2.
- Gross profit = Net sales minus the costs of goods sold.
- Operating profit = Gross profit minus selling and administrative expenses.
- Net Profit = Operating profit (plus any other income) minus any additional expenses and minus taxes.
- Doobie Company Income Statement.
- Gross Profit Margin Ratio.

**Formula**: Loss = Cost price (C.P.) – Selling Price (S.P.) **Profit** or Loss is always calculated on the cost price. Marked price: This is the price marked as the selling price on an article, also known as the listed price.