Profit percentage is an assessment of market dominance, controlling costs, and positioning strategies in financial control. Profit is the difference between what the company received from the consumer and what it paid to the vendors. The profit percentage is estimated by taking a company’s net profit and dividing it by its total sales. In this tutorial, we will explain to you how to use the profit percentage formula in Excel to determine the positioning.
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3 Quick Examples of Profit Percentage Formula in Excel
We’ll show you three examples of how to use formulas to calculate three different types of profit percentages in the sections below. Our data collection is depicted in the screenshot below. In addition, the required formula for calculating Gross profit, Operating profit, and Net profit percentages are displayed. We’ll use those formulas to achieve our goal.
We’ll use these formulas to achieve our goal.
1. Gross Profit Percentage Formula in Excel
We started by gathering financial data on a company’s overall costs and revenues. We’ll estimate the company’s Gross Profit Percentage from here. Follow the instructions below to do so.
- Type the following formula in cell C12 to calculate the Total Sales.
- To calculate the Gross Profit, enter the following formula in cell C13.
- For calculating the profit percentage, divide the value of C13 with C12. Use the following formula to do that.
- Then, multiply the result by 100.
- As a result, the percentage value will display as in the image below.
2. Operating Profit Percentage Formula in Excel
In a nutshell, operating costs refer to the expenses incurred to run the entire operation. Sales, administrative, and distribution costs may all involve in this cost run. To estimate the percentage, follow the outlined steps.
- Firstly, write the following formula in cell C13.
- After calculating the Operating Profit, enter the following formula to calculate the percentage.
- Finally, multiply the result by 100 to get the result.
- Therefore, the Operating Profit Percentage will be presented as shown in the below screenshot.
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3. Net Profit Percentage Formula in Excel
Finally, the most essential step is to determine the Net Profit Percentage. The result of actual leftover income after cutting all expenses is expressed as net profit. In a nutshell, it’s the most extensively used indicator for assessing a company’s health. Follow the steps below to calculate the net profit percentages.
- At first, enter the following formula; this will get you the Net profit.
- Divide the result with the Total Sales. Use the following formula to do so.
- Then, simply multiply the result by 100.
- So, you will get the value of the Net Profit Percentage as shown in the following image.
To recap, I hope this tutorial has given you a solid understanding of how to apply the profit percentage formula in Excel. Examine the practice book and put your newfound knowledge to use. Because of your vital support, we’re motivated to continue developing classes like these.
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