Working for a company in the managerial sector? Want to maximize the utilization of every sector of your company to achieve a definite goal? The more you maximize the percentage of utilization, the more the position of your company gets higher. So, definitely getting familiar with this idea is important for you. This article shows how to calculate utilization percentage in Excel.
Every company or organization aims to achieve a goal and that’s making their company financially strong enough in order to maximize the profit. It is a necessary measurement to assess the company’s operational efficiency. It describes what percentages of the resources it can utilize.
The utilization rate is the ratio of actual output to the maximum possible output. It is calculated in percentage form. The more a company can utilize its resources, the more it can maximize its profit. In most cases, every manufacturing company emphasizes utilization rate. The utilization rate is expressed in percentage form to provide a proper insight into the estimation capability of the managerial sector. For instance, if we are concerned about a manufacturing company and how much the company has produced and how much it has the ability to produce, Comparing these two terms will give a proper insight into how can the company utilize its resources.
How to Calculate Utilization Percentage in Excel: 3 Practical Cases
Let’s say, we are considering an XYZ company that produces a certain amount of toys in a specific period of time. In this dataset, working hours, toys produced per day, and the number of laborers working per day are available.
We want to calculate the utilization rate with respect to working hours, products, and toys. In this section, you will find 3 practical use cases where you may need to calculate percentage in Excel. I will demonstrate them one by one here. Let’s check them now!
1. Calculate Utilization Percentage of Working Hours
First, we will show the process of calculating the utilization rate of working hours for the company we are dealing with. From the dataset, we have seen that the total working hours is 8 and the actual working time is 6.5 hours. In order to demonstrate this method for calculating the utilization percentage of working hours, proceed with the following steps.
- First of all, select a cell (i.e. C6) where you want to get the utilization percentage in respect of working hours.
- Now, type the following formula in that cell.
- C4 = Working Hours
- C5 = Hours Avail to Work
- Then, press ENTER, and the cell will show the utilization rate in decimal format. But we need to find out the rate in percentage format.
- So, in order to convert decimal format to percentage format, just go to the Home tab> click Percentile Style from the Number group.
- Hence, the cell will change the format and you will get the Utilization Percentage for the working hours of that company.
2. Calculating Utilization Percentage of Products
The more you maximize the utilization of any of the resources, the more profit your company makes. For our concerning dataset, the company has a maximum ability to produce 150 toys per day. But somehow, it can produce 135 toys per day over a certain period of time due to some unavoidable reasons. In order to calculate the utilization rate of the products, follow the steps below.
- Firstly, select a cell and apply the following formula to get the utilization rate. Dividing the output by the standard value will get you the utilization rate.
- C4 = Toys Produced per Day
- C5 = Standard Production per Day
- Then, press ENTER and change the cell format to get the utilization percentage for products.
3. Labor Utilization Percentage in Excel
Like the previous ones, you can also calculate the utilization percentage for labor. The dataset shows that the total number of workers is 40 and the available number of workers is 34. If 40 workers worked continuously then the profit would be higher and then the labor would be utilized 100%. As the labor can not be utilized 100%, so the percentage will fall. To calculate the percentage, just apply the formula below.
- C4 = Labour Worked per Day
- C5 = Total Workers per Day
Here, dividing the available number of workers by the total number of workers will result in the utilization percentage for labor.
Download Practice Workbook
You can download the practice book from the link below.
I have tried to show you some methods to calculate utilization percentage in Excel in this article. I hope this article has shed some light on your way to find out the percentage. If you have better techniques, questions, or feedback regarding this article, please don’t forget to share them in the comment box.
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