1. What is Sales Ratio?

Sales Ratio is a key performance indicator that measures actual sales against target sales. It provides insight into sales performance and helps businesses evaluate their achievement against set goals.

2. How Does the Calculator Work?

The calculator uses the sales ratio formula:

Where:

• Sales — Actual sales amount (in USD)
• Target — Target sales amount (in USD)

Explanation: The ratio shows what proportion of the target has been achieved. A ratio of 1.0 means the target was exactly met, above 1.0 indicates exceeding the target, and below 1.0 means the target was not met.

3. Importance of Sales Ratio

Details: Sales ratio is crucial for performance evaluation, incentive calculations, and strategic planning. It helps identify trends, set realistic targets, and measure sales team effectiveness.

4. Using the Calculator

Tips: Enter both sales and target amounts in USD. Both values must be positive numbers, with the target value greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What does a sales ratio of 1.2 mean?
A: A ratio of 1.2 means sales exceeded the target by 20%. The actual sales were 120% of the target.

Q2: How often should sales ratio be calculated?
A: It depends on your business cycle - commonly calculated monthly, quarterly, and annually to track performance over time.

Q3: What is a good sales ratio?
A: This varies by industry and company, but generally a ratio of 1.0 or higher is considered good as it means targets are being met or exceeded.

Q4: Can sales ratio be greater than 1?
A: Yes, a ratio greater than 1 indicates that actual sales exceeded the target amount.

Q5: How is sales ratio different from sales growth?
A: Sales ratio compares actual sales to target sales, while sales growth compares current period sales to previous period sales.