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
 
Sort by date Sort by votes
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

When did Power Query debut in Excel?
Although it was an add-in in Excel 2010 & Excel 2013, Power Query became a part of Excel in 2016, in Data, Get & Transform Data.
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
You must log in or register to reply here.

Similar threads

B
  • Question Question
Generate formula to calculate sell price with respect to buy price, buy& sell out fees and desired profit margin percentage (changing variable)
Replies
1
Views
349
Cubist
Cubist
K
  • Solved
Reverse Percentage Equation Needed
Replies
3
Views
151
Cubist
Cubist
J
  • Solved
Formula to calculate desired profit margin, Acurately without Solver
Replies
7
Views
2K
6StringJazzer
6StringJazzer
A
  • Question Question
Price calculation
Replies
8
Views
603
dreid1011
dreid1011
M
  • Question Question
How to track multiple assets using one cell to input latest data
Replies
0
Views
235
micky6strings
M

Forum statistics

Threads
1,223,896
Messages
6,175,264
Members
452,627
Latest member
KitkatToby

Share this page

We've detected that you are using an adblocker.

We have a great community of people providing Excel help here, but the hosting costs are enormous. You can help keep this site running by allowing ads on MrExcel.com.
Allow Ads at MrExcel

Which adblocker are you using?

Disable AdBlock

Follow these easy steps to disable AdBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the icon in the browser’s toolbar.
2)Click on the "Pause on this site" option.
Go back

Disable AdBlock Plus

Follow these easy steps to disable AdBlock Plus

1)Click on the icon in the browser’s toolbar.
2)Click on the toggle to disable it for "mrexcel.com".
Go back

Disable uBlock Origin

Follow these easy steps to disable uBlock Origin

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back

Disable uBlock

Follow these easy steps to disable uBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back
Back
Top