The higher the turnover, the larger the business. Now for the decision-making process. The key to Dave Pratt's technique for increasing profit is to study the accompanying illustration. Starting on the left-hand side, profit is calculated by subtracting overhead from gross margin. So if profit is low, it is due to two possible reasonseither gross margin is too low or overhead is too high.
Gross margin is calculated by subtracting direct costs form gross income.
If gross income is too low, it is either because of low production or low price. If market price was not high enough it was due a down market or poor marketing techniques. If gross product is low but price is reasonable, then production is too low. If gross margin is low but gross product is not the problem, then the focus should turn to direct costs. There are only two major direct costs in beef cows feed costs and health costs.