Formula to calculate profit

H

Hammerjoe

Board Regular
Joined
Feb 4, 2012
Messages
76
I would like a quick and easy formula to help calculate profit.
Scenario.

Suppose I purchased 100 Iphone8 at $1000 each plus 15% tax.

In excel:
A1=100
B1=$1000.00
C1=15%

I tried to sell them and nobody would pay me over $1000.00 for them.
So I looked around and found another provider that would sell me the iphones for $500.00/each plus the 15% tax.

A2=100
B2=$500.00
C2=15%


Now I have a guy that would like to buy them all from me at the best price.
I need a formula that would calculate the price to sell all the iphones so that I would recoup all the money spent buying them (that includes the taxes) and on top of that I also have to pay 15% tax to sell the stock to the guy.
Of course I would also like to make a profit so to calculate the price I would like to get a 10% profit on the whole lot.

Any help would be appreciated.
Thanks
 
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Ah, I get the disconnect, sorry: The 15% tax rate is a markup, not the percent of sales collected.

[Table="width:, class:grid"][tr][td="bgcolor:#C0C0C0"][/td][td="bgcolor:#C0C0C0"]
A​
[/td][td="bgcolor:#C0C0C0"]
B​
[/td][td="bgcolor:#C0C0C0"]
C​
[/td][td="bgcolor:#C0C0C0"]
D​
[/td][td="bgcolor:#C0C0C0"]
E​
[/td][td="bgcolor:#C0C0C0"]
F​
[/td][/tr][tr][td="bgcolor:#C0C0C0"]
1​
[/td][td="bgcolor:#F3F3F3"]
Lot​
[/td][td="bgcolor:#F3F3F3"]
Qty​
[/td][td="bgcolor:#F3F3F3"]
Unit Cost​
[/td][td="bgcolor:#F3F3F3"]
Tax​
[/td][td="bgcolor:#F3F3F3"]
Total cost​
[/td][td="bgcolor:#F3F3F3"]
​
[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
2​
[/td][td]
1​
[/td][td]
100​
[/td][td]
$ 1,150.00​
[/td][td]
$ 17,250.00​
[/td][td]
$ 132,250.00​
[/td][td][/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
3​
[/td][td]
2​
[/td][td]
220​
[/td][td]
$ 600.00​
[/td][td]
$ 19,800.00​
[/td][td]
$ 151,800.00​
[/td][td][/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
4​
[/td][td]
3​
[/td][td]
115​
[/td][td]
$ 500.00​
[/td][td]
$ 8,625.00​
[/td][td]
$ 66,125.00​
[/td][td][/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
5​
[/td][td]Total cost with tax[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
$ 350,175.00​
[/td][td]E5: =SUM(E1:E4)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
6​
[/td][td]Unit COST (not PRICE)[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
$ 805.00​
[/td][td]E6: =E5/SUM(B2:B4)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
7​
[/td][td]Sales Tax Rate[/td][td][/td][td][/td][td][/td][td]
15%​
[/td][td]E7: Input[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
8​
[/td][td]Target MARGIN (not PROFIT)[/td][td][/td][td][/td][td][/td][td]
10%​
[/td][td]E8: Input[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
9​
[/td][td]Sell Price[/td][td][/td][td][/td][td][/td][td="bgcolor:#CCFF99"]
$ 1,046.05​
[/td][td]E9: =E6 / (1 - E7 / (1+E7) - E8)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
10​
[/td][td][/td][td][/td][td][/td][td][/td][td][/td][td][/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
11​
[/td][td]How much is TAX?[/td][td][/td][td][/td][td][/td][td="bgcolor:#CCFF99"]
$ 136.44​
[/td][td]E11: =E9 * E7 / (1 + E7)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
12​
[/td][td]How much is PROFIT?[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
$ 104.60​
[/td][td]E12: =E9-E6-E11[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
13​
[/td][td]What's my MARGIN?[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
10.00%​
[/td][td]E13: =E12/E9[/td][/tr]
[/table]
 
Upvote 0

Excel Facts

Whats the difference between CONCAT and CONCATENATE?
The newer CONCAT function can reference a range of cells. =CONCATENATE(A1,A2,A3,A4,A5) becomes =CONCAT(A1:A5)
shg said:
Ah, I get the disconnect, sorry: The 15% tax rate is a markup, not the percent of sales collected.

[TABLE="class: grid"]
<tbody>[TR]
[TD="bgcolor: #C0C0C0"][/TD]
[TD="bgcolor: #C0C0C0"]
A​
[/TD]
[TD="bgcolor: #C0C0C0"]
B​
[/TD]
[TD="bgcolor: #C0C0C0"]
C​
[/TD]
[TD="bgcolor: #C0C0C0"]
D​
[/TD]
[TD="bgcolor: #C0C0C0"]
E​
[/TD]
[TD="bgcolor: #C0C0C0"]
F​
[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
1​
[/TD]
[TD="bgcolor: #F3F3F3"]
Lot​
[/TD]
[TD="bgcolor: #F3F3F3"]
Qty​
[/TD]
[TD="bgcolor: #F3F3F3"]
Unit Cost​
[/TD]
[TD="bgcolor: #F3F3F3"]
Tax​
[/TD]
[TD="bgcolor: #F3F3F3"]
Total cost​
[/TD]
[TD="bgcolor: #F3F3F3"][/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
2​
[/TD]
[TD]
1​
[/TD]
[TD]
100​
[/TD]
[TD]
$ 1,150.00​
[/TD]
[TD]
$ 17,250.00​
[/TD]
[TD]
$ 132,250.00​
[/TD]
[TD][/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
3​
[/TD]
[TD]
2​
[/TD]
[TD]
220​
[/TD]
[TD]
$ 600.00​
[/TD]
[TD]
$ 19,800.00​
[/TD]
[TD]
$ 151,800.00​
[/TD]
[TD][/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
4​
[/TD]
[TD]
3​
[/TD]
[TD]
115​
[/TD]
[TD]
$ 500.00​
[/TD]
[TD]
$ 8,625.00​
[/TD]
[TD]
$ 66,125.00​
[/TD]
[TD][/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
5​
[/TD]
[TD]Total cost with tax[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="bgcolor: #E5E5E5"]
$ 350,175.00​
[/TD]
[TD]E5: =SUM(E1:E4)[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
6​
[/TD]
[TD]Unit COST (not PRICE)[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="bgcolor: #E5E5E5"]
$ 805.00​
[/TD]
[TD]E6: =E5/SUM(B2:B4)[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
7​
[/TD]
[TD]Sales Tax Rate[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD]
15%​
[/TD]
[TD]E7: Input[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
8​
[/TD]
[TD]Target MARGIN (not PROFIT)[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD]
10%​
[/TD]
[TD]E8: Input[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
9​
[/TD]
[TD]Sell Price[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="bgcolor: #CCFF99"]
$ 1,046.05​
[/TD]
[TD]E9: =E6 / (1 - E7 / (1+E7) - E8)[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
10​
[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
11​
[/TD]
[TD]How much is TAX?[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="bgcolor: #CCFF99"]
$ 136.44​
[/TD]
[TD]E11: =E9 * E7 / (1 + E7)[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
12​
[/TD]
[TD]How much is PROFIT?[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="bgcolor: #E5E5E5"]
$ 104.60​
[/TD]
[TD]E12: =E9-E6-E11[/TD]
[/TR]
[TR]
[TD="bgcolor: #C0C0C0"]
13​
[/TD]
[TD]What's my MARGIN?[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD="bgcolor: #E5E5E5"]
10.00%​
[/TD]
[TD]E13: =E12/E9[/TD]
[/TR]
</tbody>[/TABLE]
Click to expand...


Thank you so much for the help.
I really appreciate.

I am still not getting the same result.
With my manual math I get a total of $1018.32.
I still dont get how your formula gives a different result??

 
Upvote 0
How are you calculating the price?
 
Upvote 0
You are calculating Price = Cost * (1 + taxRate) * (1 + Margin).

When you do that, how much do you have to pay the Government?

What's your profit?

What's your margin?

[Table="width:, class:grid"][tr][td="bgcolor:#C0C0C0"][/td][td="bgcolor:#C0C0C0"]
A​
[/td][td="bgcolor:#C0C0C0"]
B​
[/td][td="bgcolor:#C0C0C0"]
C​
[/td][td="bgcolor:#C0C0C0"]
D​
[/td][td="bgcolor:#C0C0C0"]
E​
[/td][td="bgcolor:#C0C0C0"]
F​
[/td][/tr][tr][td="bgcolor:#C0C0C0"]
6​
[/td][td]Unit COST (not PRICE)[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
$ 805.00​
[/td][td]E6: =E5/SUM(B2:B4)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
7​
[/td][td]Sales Tax Rate[/td][td][/td][td][/td][td][/td][td]
15%​
[/td][td]E7: Input[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
8​
[/td][td]Target MARGIN (not PROFIT)[/td][td][/td][td][/td][td][/td][td]
10%​
[/td][td]E8: Input[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
9​
[/td][td]Sell Price (WRONG)[/td][td][/td][td][/td][td][/td][td="bgcolor:#CCFF99"]
$ 1,018.33​
[/td][td]E9: =E6 * (1+E7) * (1+E8)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
10​
[/td][td]How much is TAX?[/td][td][/td][td][/td][td][/td][td="bgcolor:#CCFF99"]
$ 132.83​
[/td][td]E10: =E9 * E7 / (1 + E7)[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
11​
[/td][td]How much is PROFIT?[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
$ 80.50​
[/td][td]E11: =E9-E6-E10[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
12​
[/td][td]What's my MARGIN?[/td][td][/td][td][/td][td][/td][td="bgcolor:#E5E5E5"]
7.91%​
[/td][td]E12: =E11/E9[/td][/tr]
[tr][td="bgcolor:#C0C0C0"]
13​
[/td][td][/td][td][/td][td][/td][td][/td][td]
^^ oops​
[/td][td][/td][/tr]
[/table]
 
Upvote 0
Thank you so much for the help.
I am sorry about the confusion, its my fault.

I should have said instead of tax that it was a transaction fee.

Theres a transaction fee when buying and a transaction fee when selling.
The profit margin comes in when the price per unit and transaction fee are factored in.


In this example the margin is 10%.
So calculate the $805 plus 15% transaction fee and after that apply the profit margin of 10%
 
Upvote 0
Is there something wrong with my Excel? (Version 2007).

When I do =700/(1-0.15) I get the result 823.5294118 and not 805.

(700*0.15=105, 700+105=805)
 
Upvote 0
Joe, the formulas in post#21 are correct. If you think they are not, explain why. Otherwise, why not use them?
 
Upvote 0
shg said:
Joe, the formulas in post#21 are correct. If you think they are not, explain why. Otherwise, why not use them?
Click to expand...

Because I am not geting the same results SHG.

Read my last post.
In my excel sheet if I do the math $700.00 plus 15% should give a total of $805.00 but using the formula =700/(1-0.15) it gives as result $823.5294118.
Why arent the amounts the same?
 
Upvote 0
Because 1+x is not the same as 1/(1-x)

If you want 10% margin on PRICE (which is where margin is measured), you need to divide cost by (1/10%), not multiply by (1+10%).
 
Upvote 0
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