How is the Total Profit Calculated on the Profit Report?

The Total Profit on the Profit Report within the Sales Manager's Toolkit is calculated using a formula that incorporates various components of the deal, including costs, discounts, and profit sources. This guide breaks down the formula used to arrive at the total profit figure.

Profit Calculation Formula

Total Profit =
Vehicle Retail

• Vehicle Cost
  ± Discount
• PDI/Prep
• Dealer-Fitted Options (D-OPT) Profit
• Warranty (WARR) Profit
• Finance Commissions
• Other Costs

Explanation of Each Component

1. Vehicle Retail:

   • The sale price of the vehicle as invoiced to the customer.

2. Vehicle Cost:

   • The cost of the vehicle, including purchase price and associated expenses.

3. Discount:

   • Any discounts applied to the deal.
     • Positive Discounts: Decrease profit.
     • Negative Discounts: Increase profit (e.g., a surcharge or reduction in discount).

4. PDI/Prep:

   • Profit from Pre-Delivery Inspection (PDI) and preparation work.

5. Dealer-Fitted Options (D-OPT) Profit:

   • Profit generated from dealer-installed accessories or options.

6. Warranty (WARR) Profit:

   • Profit earned from the sale of warranty packages.

7. Finance Commissions:

   • Earnings from finance-related services, such as loans or lease agreements.

8. Other Costs:

   • Additional costs incurred that impact the total profit.

Final Calculation

By summing up all the components above, you will arrive at the Total Profit value displayed on the Profit Report.

Key Notes

• Consistency: The formula ensures that the profit aligns accurately with all deal elements.
• Verification: Use the Profit Report in the Sales Manager’s Toolkit to cross-check values for accuracy.
• Component Breakdown: Each element in the formula contributes to providing a transparent view of the deal's profitability.

Scenarios Where This Process is Useful

• Reviewing profitability for individual deals.
• Analysing overall sales performance.
• Ensuring all components of a deal are correctly factored into the profit calculation.