PI's: Operating Margin (Lettings)
Regulator for Social Housing: Operating Margin (Lettings)
RSH 102: Operating margin (social housing lettings)
Rationale, Definition & Worked Example
Below you can find information regarding the rationale, definition and formula for this performance indicator. This includes a worked example to demonstrate how this indicator should be calculated.
Rationale
Measures the amount of surplus generated from turnover on social housing lettings; indicator of operating efficiency and business health.
Definition
Gain/loss on disposal of property, plant and equipment is not included in operating surplus. Similarly, results of JVs are not included in either turnover or operating surplus.
Formula
(A / B) * 100
A = Operating surplus/(deficit) on social housing lettings, not including Gain/(loss) on disposal of fixed assets (housing properties). Similarly, results of JVs are not included in either turnover or operating surplus.
B = Turnover from social housing lettings
A = Operating surplus/(deficit) on social housing lettings, not including Gain/(loss) on disposal of fixed assets (housing properties). Similarly, results of JVs are not included in either turnover or operating surplus.
B = Turnover from social housing lettings
Worked Example
Operating surplus from social housing lettings = £1,800,000
Turnover from social housing lettings = £9,000,000
Calculation:
£1,800,000 ÷ £9,000,000 × 100 = 20%