Indicative Profit Margin Calculation

INDICATIVE PROFIT MARGIN CALCULATION

The indicative profit margin is applied when a measured entity has made less than a quarter of the industry norm. Enterprise development, supplier development as well as socio-economic development are based on the percentage of either a NPAT or an indicative profit margin where a measured entity has made less than 25% of the industry. The three above mentioned sub-elements constitute 24 points of the generic scorecard.

SANAS issued a clarification on the 30th of July 2020 in terms of the steps to be followed when calculating the indicative profit margin, and this has prompted measured entities, BEE consultants as well as verification agencies to start querying how the steps must be followed in order to calculate the indicative profit margin.

Based on our interaction with several verification agencies, SANAS as well as the DTI, it is prudent that we clarify this to you as our valued client as the answer is not straight forward.

Why not give us, at EconoBEE, a call on 011 483 1190 so that we can explain and help you with queries such as: “When does a measured entity apply the average NPAT?” Or “When must the targets be turnover based etc?” or any other B-BBEE related matter!!

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