Updated 17-04-2022

### Insert your Cost and Required Profit in the table below.

The correct Income will be calculated for you

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

Example using the formula GetIncome(50,0.12):