Definition:

ABR is a core profitability metric and a staple of the output of an agency audit. It can measure the earning efficiency of any time period and/or slice of the agency for which you have two simple pieces of information: AGI (Agency Gross Income) and Delivery Hours. For example, you could decide to compare ABR across all your website projects in the last 6 months. Let’s break it down!

Formula:

AGI / Delivery Hours

Example:

You can use ABR to compare projects to figure out which client or product is the most profitable. Let’s compare three projects:

Project 1:

$75,000 / 1260 hours = $59.52 ABR

Project 2:

$50,000 / 580 hours = $86.20 ABR

Project 3:

$60,000 / 425 hours = $141.17 ABR

Clearly, revenue on Project 3 was earned the most efficiently at an ABR of $141 per hour. This may help you identify the most/least profitable clients, service lines, or other slice of your agency.

**ℹ️** If you have any other questions on the topic, please don’t hesitate to reach out to your Parakeeto Account Manager so they’re able to give you the clarity you need!