Sales is typically evaluated using 2 indicators: Budget Ratio and Period Ratio. Here's how they differ and when to use each.
Indicator | What it measures against | How it's calculated |
|---|---|---|
Budget Ratio | The target your company (or store) set | Actual sales ÷ budget |
Period Ratio | A past period (last year, last month, etc.) | Actual sales ÷ actual sales for that past period |
Example: say a month's sales came to ¥10,000,000. If the budget was ¥11,000,000, Budget Ratio is 90.9%. If last year's actual was ¥9,000,000, Period Ratio (year-over-year) is 110.0%. Same sales figure, very different read depending on which indicator you use.
Which one to use depends on why you're evaluating sales in the first place.
If the person you're reporting to wants to know how you're tracking against a target, report Budget Ratio.
If they want to know how things have changed compared to the past, report Period Ratio.
If reporting doesn't come naturally, it's worth learning the "PREP" conversational model.
What is PREP?
Learn about PREP, a conversational model for communicative reporting.
To understand where your store stands right now, compare the present against the past. The 3 most common comparison windows:
Comparison window | Best for | Watch out for |
|---|---|---|
Week-over-week | Weekly improvement cycles | — |
Month-over-month | Monthly reviews | Stores with seasonal products see big swings month to month — use with care |
Year-over-year | Comparable conditions across a 6-12 month merchandising cycle | Shorter comparison windows are more exposed to noise — weather, temperature, current events |
This covered how to evaluate sales using your own store's data. You can also evaluate sales using data outside your store — comparing against other stores in your company, or against competitors in the same location.
Get clear on your purpose first, then pick the comparison method that fits. Questions are always welcome through the contact form.
If you have any questions or feedback, please contact support at [email protected].
