How To Calculate Economic Profit

Table of contents:

How To Calculate Economic Profit
How To Calculate Economic Profit

Video: How To Calculate Economic Profit

Video: How To Calculate Economic Profit
Video: Economic profit vs accounting profit | Microeconomics | Khan Academy 2024, March
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If you set out to increase the efficiency of a trading company, then "put" the value of the expected profit into the markup of the goods. What result you achieve depends on the method of calculating the allowance. If we are talking about small stores, then determine the trading margin “manually” and you will not have to spend money on expensive software. Proceed from the total turnover, from the assortment of turnover, from the average percentage, from the assortment of the remainder of the goods.

How to calculate economic profit
How to calculate economic profit

Instructions

Step 1

Calculate gross income based on total sales if you apply a single trade markup percentage to all products. In this case, first set the gross income, then determine the markup. To calculate gross income, multiply the total turnover by the estimated trade markup, and divide the result by one hundred. To calculate the trade markup, first add 100 and the trade markup as a percentage, then divide the same trade markup by your result.

Step 2

If in your case you work with not the same mark-up for different groups of goods, then the calculation of profit becomes more complicated. Be sure to keep records of turnover. To calculate the gross income in this situation, first multiply the trade markup for each product group by their turnover, then add up all the results obtained and divide the amount by one hundred.

Step 3

You can apply an average percentage mark-up in the profit calculation if you take into account the item at the sales price. To get the average percentage of gross income, multiply the turnover by the average percentage of gross income. Divide the result by 100. If you need to find the average percentage of gross income, then first add up the trade markup for the remainder of the product at the beginning of the reporting period and the markup for goods received during the current time. Subtract the trade margin for retired (write-off or refund) from the amount. This is your first average percentage calculation. Now add up the value of the turnover and the balance at the end of the reporting period, divide the amount by 100, you got the second result. Now divide the first result by the second result.

Step 4

If you are calculating the gross margin for the remainder of the assortment, then consider the amount of the trade margin. To do this, keep records of the accrued, realized mark-up for each item. Take an inventory at the end of the month to determine these amounts. To calculate the gross profit for the assortment of the remaining goods, first add the trade markup on the balance of goods at the beginning of the reporting period and the trade markup on the goods received for the same period, subtract the trade markup on the disposed goods from the amount, and subtract the markup on the balance at the end from the result. reporting period.

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