Profit per Child
In the Education sector profitability is often tied to the number of children which are on the school’s, nursery’s or institution’s books.However each child also comes with associated costs. By examining your Profit per Child you can ensure that the institution is being operated efficiently. Maintaining a sufficient Profit per Child figure is important in order to ensure the school’s Cash Flow stability. A low Profit per Child may indicate that your costs are too high or that the sums you are demanding for admittance need investigating. If the number of children on your books is also low, then investing in marketing to increase applicants may prove necessary for maintaining the institutions long-term viability.
Making the KPI
In order to make Profit per Child you will need to know:
- Number of children on your books
- Total Revenue generated from child-related sources
Number of children is a non-financial metric, which should be uploaded into FUTRLI via CSV. Total Revenue generated is a financial metic which you should be able to source from your Accountancy Platform of choice via CrunchBoard’s automatic sync – or upload via CSV.
Once all your data is present within FUTRLI you can calculate Profit per Child by dividing your Total Child-related Revenue by the number of children on your books. Below we’re looking at a Childcare example where we’re attempting to uncover where our main sources of revenues derive from. Here we’ve categorised by Full Day, Full Morning and Full Afternoon, dividing the fees obtained from each category by the number of children who fall into each camp:
We can then view our Profit per Child broken down by income source over time: