Calculating the Impact of Accidents on Profits & Sales

Instructions: Use this worksheet to determine the total costs of injuries and illnesses and their financial impact on your company\'s business operations.

STEP 1: DIRECT COST

To calculate direct cost of accidents/injuries, enter the following information:

* Total value of insurance claim for injury/illness $________________

(consists of medical costs and indemnity payments)

STEP 2: INDIRECT COST

To calculate direct costs of injury/illness, multiply the direct cost by a cost multiplier. The cost multiplier you use will depend on amount of direct costs

* Direct Cost X Cost Multiplier = Indirect Cost

$___________ X $___________ = $__________

STEP 3: TOTAL COST

* Direct Cost + Indirect Cost = Total

$___________ + $___________ = $__________

STEP 4: IMPACT ON PROFITABILITY

To calculate an injury/illness\'s impact on profitability, use your company\'s profit margin to determine sales your company would have to generate to pay for the injury/illness.

Divide total profits by total sales to get your profit margin

Total Profits / Total Sales = Profit Margin

$_________ / $_________ = _________

STEP 5: SALES NEEDED TO OFFSET

Divide total cost of injury/illness by profit margin to calculate how many sales your company must generate to pay for injury/illness. Keep the profit margin in decimal form.

Total Cost of Injury or Illness / Profit Margin = Sales Needed to Pay for Injury/Illness

$_________ / _________ = $_________

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