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Income calculator
Income calculator
Avoid mistakes when calculating Income using Cost & Required Profit %.
Avoid mistakes when calculating Income using Cost & Required Profit %.
Marc Fletcher
Updated 17-04-2022
Twitter:
Marc Fletcher
Insert your Cost and Required Profit in the table below.
The correct Income will be calculated for you
Cost
Required Profit
Income
Cost
Required Profit
Income
1
0.00
0.00%
0.00
There are no rows in this table
What’s the point of this?
Lots of people calculate Income incorrectly because they base the Required Profit % on Cost. Like this:
Say Cost =
50
& Required Profit =
12%
Profit calculation:
50
x
0.12
=
6
Income calculation:
50
+
6
=
56
To prove this is wrong, we use the correct way to calculate Profit %. The formula is Profit % = Profit / Income
Profit % calculation:
6
/
56
=
11%
The correct way to calculate Income when you know a Cost and Required Profit % is like this:
Say Cost =
50
& Required Profit =
12%
Income calculation:
50
/ (1-
0.12
)
Income calculation:
50
/ 0.88 =
56.82
We’re saying
50
is 88% of Income and therefore
56.82
is 100% of Income. Lets prove it:
Profit calculation: 56.82 -
50
=
6.82
Profit % calculation:
6.82
/
56.82
=
12%
Notes.
- We use percentages as decimals in the calculations. 100% is 1. 50% is 0.5. 35% is 0.35 etc.
- This table compares Profit to Income. 99% is the maximum Profit because Profit can’t be greater than Income.
A Coda Doc formula for this calculation can be found in the
Business formulas Pack
Example using the formula GetIncome(50,0.12):
56.82
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