Financial Ratios Overview

Standard accounting financial ratios are available for dealers to use within the IntelliDealer - Management Central application. This system can list financial ratios for a number of months, departments, and locations. It can also produce budget comparatives, provided that the dealership's budgets are correctly loaded.

The Financial Ratios feature allows the dealer to see the raw numbers calculated by the system and the formulas used to calculate the selected ratios.

Financial Ratios are calculated based on values loaded through the Budget Account Selection screen accessed from Financial Management Quick Links > General Ledger > Budgets.

Topics in this section include:

Set up

  1. Ensure all account groupings are correct by navigating to Configuration > General Ledger > G/L Accounts > Profit Centers. For each profit center: 

    1. Click on a the profit center link in the list.

      Profit Centers

    2. Validate that Profit Center Grouping and Location Grouping fields are correct.

  2. Navigate to Configuration > General Ledger > G/L Account > Account Profile. For each account number:

    1. Click the Account Number link.

      Account Profile


    2. Set the Ratio Codes to the required values.

  3. You can now set up your dealers budget comparison values for the financial ratios (the budget comparison values are separate from your regular budget values). Navigate to Financial Management > General Ledger > Budgets, then click the Maintain Financial Ratio Budgets link .

    Financial Ratios Budget


Areas Impacted

The comparison budget ratios values entered on the Financial Ratios Budget screen are used to calculate the Your Budget financial ratio data on the Financial Ratios screen located at Management Central > Financial > Financial Ratios.


To see the values used to calculate the Your Indicator and Your Budget columns, click the Show amounts used for calculations link and the Financial Ratios screen appears.


Formulas

The Financial Ratios formulas used are:

Sales Mix
New Equipment N / (N + U + R + M + V)
Used Equipment U / (N + U + R + M + V)
Rentals R / (N + U + R + M + V)
Parts M / (N + U + R + M + V)
Service V / (N + U + R + M + V)
Profitability
Gross Margins
New Equipment (N - Z) / N
Used Equipment (U - X) / U
Rentals (R - Q) / R
Parts (M - P) / M
Service (V - Y) / V
Total (N + U + R + M + V) - (Z + X + Q + P + Y) / (N + U + R + M + V)
Operating Expense % E / S
Pre Tax Income % (S - D - E - F) / S
Revenue Per Employee

S / Number of Employees

The Number of Employees value is set in Configuration > Miscellaneous > Other > System Settings, Location tab.

Absorption Rate ((M - P) + (V - Y)) / (E + 1)
Sales to Equity S / G
Return on Assets (S - D - E - F) / A
Return on Equity (S - D - E - F) / G
EBIT (S - D - E - F + 1 + 3) / S
EBITDA (S - D - E - F + 1 + 2 + 3) / S
Return (after taxes) on Working Capital (S - D - E - F) / ( C - L)
Return (before taxes) on Gross Margin (S - D - E - F - 3) / ((N + U + R + M + V) - (Z + X + Q + P + Y))
Return (after taxes) on Gross Margin (S - D - E - F) / ((N + U + R + M + V) - (Z + X + Q + P + Y))
Activity
Days Sales Outstanding (Avg. Begin B and End B) / (N + U + R + M + V) * 365
Inventory Turns
New Equipment Z / (Avg. Begin W and End W)
Used Equipment X / (Avg. Begin K and End K)
Rental Q / (Avg. Begin H and End H)
Parts P / (Avg. Begin O and End O)
Liquidity
Current Ratio C / L
Quick Ratio (I + J) / L
Coverage
Leverage Ratio T / G
Current Debt to Inventory L / (H + K + O + W)
Net Sales to Working Capital S / G
Net Sales to Total Assets S / A
Additional Ratios
Contribution Margin % (S - D - E - F) / S
Return on Service Labor (V - 4) / 5
Debt Service Ratio (S - D - E - F + 1 + 3) / 1

Example:

This example shows you how to calculate the Operating Expense % for both the Your Indicator and Your Budget columns on the Financial Ratios screen.

The Operating Expense % formula is (E/S) x 100

  1. To see the E (total expense) and S (total sales) values click the Show amounts used for calculations link on the Financial Ratios screen.


  2. On the Financial Ratios screen there are two columns of values, the Calculated Amount and the Budget Amount. The values under the Calculated Amount column are used for calculating values for the Your Indicator column on the previous screen. The values under the Budget Amount (pulled from the values entered on the Financial Ratio Budgets screen) are used for calculating values for the Your Budget column on the previous screen.

  3. From the Financial Ratios screen, locate the E (total expense) and S (total sales) values on both the Calculated Amount and the Budget Amount columns.


 

Therefore the Calculated Amount is: 

Operating Expense % = (E/S) x 100
= (4,461,827.46/59,317,268.16) x 100
= (0.0752) x 100
= 7.52

And the Budget Amount is 

Operating Expense % = (E/S) x 100
= (10,000,000.00/80,000,000.00) x 100
= (.125) x 100
= 12.5

As you can see the results are the same as the Operating Expense % on the Financial Ratios screen.

Revision: 2024.11