In many projects, management calculates the margin (the share of net profit from turnover) or directly the net profit.
But in both cases, a number of questions arise: what exactly should be subtracted to obtain the “pure” value?
The question is quite reasonable, since companies often work on funds taken on credit. Initial capital investments can reach large sums. As a result, there is no net profit left or it can be completely negative (due to mandatory loan payments).
So, normally, to obtain net profit, the following are deducted from income:
fixed costs (rent of premises, subscriptions to sri-lanka phone number data specialized tools, hosting rent, payment for mailing services , purchase of advertising, expenses for website builders , ERP and CRM systems, corporate mail, etc.);
wage fund (salaries of full-time specialists, payment for services of third-party/one-time contractors);
unplanned expenses (for example, those required to resolve emergency situations and problems, including email marketing audits );
capital expenditures (purchase of equipment, offices, production lines);
investments in goods (raw materials, inventory, etc.);
payment of loans and credit servicing.
On the one hand, this is logical. But, on the other hand, capital investments do not pay off immediately. For example, having paid for an office space in full, a company can work in it for decades.
No business can pay for itself in the first month after starting work. If you calculate its net profit during the payback period, the indicator will always be negative.
This is why businesses, including marketing agencies, increasingly calculate not real net profit, but operating profit. It is calculated based on the depreciation of capital investments - when initial investments in the means of production (in the company's fixed assets) are redistributed to the cost of a unit of production with reference to the planned depreciation (payback) period.
ROI Calculation Examples
Example 1
The company earned 845,000 rubles from the sale of goods. This is the total amount of income for the month. During the same month, the company paid wages in the amount of 200,000 rubles, spent 50,000 rubles on renting an office and production facilities, as well as 80,000 rubles on purchasing raw materials, 100,000 rubles on paying off loans for the production line, and 250,000 rubles on depreciation of fixed assets.
Example 2
The company spent 265,000 rubles on marketing for the month (for example, on advertising in the Yandex.Direct contextual ad network).
The sales amount for the same period was 500,000 rubles.
Then the ROMI (return on marketing investment) was:
Or 235000:265000 = 0.8868:1. Which means that for every ruble invested we receive 0.88 rubles of profit.
Please note that this calculation does not take into account net profit (all associated costs associated with the production of goods are not taken into account here).