This free Excel Monte Carlo simulation calculator uses triangular distributions to randomly select values for sales volume and unit cost and using fixed values for selling price and operating expenses, calculates the average profit for a startup business based on one thousand iterations of its profit model.
A startup business often pays a profit sharing bonus to its employees. The bonus is based on the net income of the business which is calculated after deduction of the profit share itself and taxation. In addition the business may decide to deduct an amount of net income required for its operations before the calculation of any bonus profit share. This free Excel calculator can be used to calculate the profit share bonus.
A business needs to understand that there is a difference between profit and cash. Eventually a business needs to be able to make a profit, however, providing it is properly financed and has adequate cash flow a business can survive for a considerable period of time without profits.
The profit improvement calculator shows the impact on net income of making percentage adjustments to the product selling price, unit cost, unit sales volume and operating expenses. Minor adjustments to each of these four key areas can have a significant impact on the net income of the business.
The target profit analysis can be used to quickly calculate the combination of number of units, selling price, cost price, and fixed costs needed for a business to achieve a given target operating profit. It is particularly useful for target profit pricing to determine the product selling price necessary to reach the target profit margin.