Calculate Expenses and Profit of Each Product


Now that you’ve found your profit margins,
learn more about your business expenses by calculating the out-of-pocket costs, gross
sales, and profits. To the right of the “Margin” column, add
three more column headings to your spreadsheet for
Out-of-Pocket Costs Gross Sales
and Profit. The Out-of-Pocket Cost is the number of items
originally in stock multiplied by the cost per unit. This number tells you how much you spent to
create your entire stock of each item. Begin typing your formula in cell H2, Type
an equals sign, and then add the cell number for Original Stock. In this case, B2. Add an asterisk to indicate multiplication. Then, input the cell for Total Cost Per Unit. In this example, it’s E2. Press Enter. The result of the formula appears in the cell. Double check the math, then drag the formula
to the rest of the column. Now move on to gross sales. Gross sales describes the total amount of
money you received for an item. In cell I2, type an equals sign, then multiply
the total number of items sold by the retail price. Press enter, and copy the formula down the
rest of the column. Next, determine your profit. In an online business, or any company, understanding
profitability is critical. A company can’t stay in business without
making a profit Profit is gross sales minus out-of-pocket
costs. In cell J2, type an equals sign, then subtract
costs from sales. Press enter, and drag to copy the formula
down the column. To make your spreadsheet easier to read as
it gets larger and more complex, try freeze cells.This keeps specific rows or columns
from moving as you scroll through your spreadsheet. Highlight the row containing your column headings,
and freeze it. Now the headings remain visible as you scroll
through your spreadsheet. Next, freeze the column containing your list
of product types. You’ve learned so much about calculating
your inventory and expenses! Consider this data when determining which
products are most valuable for your business. Even if you like an item, if it isn’t profitable,
it’s probably not worth selling. Now, it’s your turn:
Add columns for “Out-of-Pocket Costs,” “Gross Sales,” and “Profit”
Use formulas to calculate each total. Copy formulas down each column. And freeze the first row and column in your
spreadsheet.

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