Throughput and
kWh/t benchmark the operating efficiency of
the feed mill. These benchmarks are calculated as follows:
Throughput = Tons produced
/ Capacity
kWh/t = kWh /
Tons produced
The profit margin ratio is
calculated using numbers entirely from the income statement:
Profit Margin Ratio = (
Net Income + Interest Expense) / Sales
The net income ratio is
calculated as follows:
Net Income Ratio = Net
Income / Sales
The total expense ratio is
calculated using data from the income statement as follows:
Total Expense Ratio =
(Sales - Net Income) / Sales
Individual expense items are
computed as follows:
Personnel Expenses/Ton =
Personnel Expenses / Tons Produced
Administrative Expenses/Ton =
Administrative Expenses / Tons Produced
Selling Expenses/Ton = Selling
Expenses / Tons Produced
Selling Expenses/Sales = Selling
Expenses / Total Sales
Delivery Expenses/Ton = Delivery
Expenses / Tons Delivered
Miles/Ton = Total Miles / Tons
Delivered
Efficiency of personnel can also be measured using percent
overtime:
% Overtime = Overtime Hours /
Total Man Hours
Overtime may simply be another form of assessing manpower cost. In
many feed mills, overtime is a form of bonus and employees come to expect the
additional income associated with working overtime. In other feed mills,
overtime may represent a seasonal variation in work and a necessary management
decision. Total man hours include hours worked by all hourly production
employees.
Return on assets is derived from
using both the income and balance sheet statements:
Return on Assests = ( Net
Income + Interest Expenses) / Average Total Assets
Sales to total assets
is an efficiency ratio calculated using sales from the income statement and
average total assests from the balance sheet statement:
Sales to Total Assests =
Sales / Average Total Assets