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What is gross, net and operating profit margin and how to calculate it in Excel

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What is gross, net and operating profit margin and how to calculate it in Excel

It is natural for every company or business to have a daily management system for the profits obtained from the sales of a product. But it is very true that there are terms and data that can help facilitate this work, for this we will talk about the profit margin.

What is the profit margin?

The profit margin is the inequality between the amount of sale of an item or service, fixed and variable expenses. This in-so is related to the processes of commercialization and maintenance of a company or company.

Why is profit margin important?

For a company to function well internally, it is important to take into account everything that the profit margin implies. Knowing the difference in the price of an item and its elements involved will allow having data that will help to visualize if the applied strategy is profitable.

Taking the profit margin into account will allow a company, whether a sole proprietorship or corporate, to understand whether the distributors are the right ones to boost resources. By having a profit margin, you will be able to answer questions that arise as a project progresses, and they are these:

  1. Does the sale that is made satisfy the needs of those who make up a company or team?
  2. Is there a way to minimize the expenses that are made in the production, without affecting the quality of the product?
  3. Is the marketing strategy that is implemented to generate more profits functional and practical?

What is gross, net, and operating margin?

Next, we will show you a brief explanation in the form of an outline of what a net, gross, and operating profit margin is.

What is gross, net and operating profit margin and how to calculate it in Excel

The gross profit margin: It refers to what is earned after deducting the final price of the direct and indirect costs in the production of an item.

The net margin: It is the one that is acquired once the fixed expenses such as water, electricity, services among others that are carried out around the business are subtracted.

Operating profit margin: This is a financial percentage that measures the performance of a company, through the functions acquired before the payment of taxes and interests.

Calculate Profit Margin in Excel How?

  • Open the Excel program and create a new spreadsheet where you will use the columns ‘Revenue’, ‘Cost of Production’, ‘Profit’, and ‘Profit Margin’.
  • In the column labeled ‘Income’, you will enter the price of one of the items on offer.
  • In the column ‘Cost of production,’ you will add the total cost that involves labor plus services.
  • Identify the gross profit, this will be updated in the column ‘Profit’. Here you will enter a calculation formula that subtracts the cost of production data from the data in the Income column, the formula is = B2-C2.
  • To calculate the profit margin or percentage, you must change the formula mentioned above and it would be D2 / B2 * 100.
  • To keep a more accurate control, make a column to record the data of the number of items you sell per day. To do this, use the following formula = B2 * (plus the price of the item), where B2 corresponds to the number of products sold, and the amount you place after is the amount that the product is canceled.
  • Copy the formulation down, in order to have the totals for each item, at the same time select the addition formula and the boxes that correspond to the same data.
What is gross, net and operating profit margin and how to calculate it in Excel
  • Next, in another Excel sheet within the same file that you already have, you will create columns that have the following data ‘Fixed Expenses’, ‘Variable Expenses’, ‘Total Expenses’, and another called ‘Profit’.
  • For this new sheet to be updated exactly like the previous one, you just have to press the equal sign (=) next to the box where the total profit for the month is and press ‘Enter’.
  • To calculate the net profit, you just have to apply the formula that we have explained to you in previous steps.
  • Finally, you will write the formula that responds to the percentage margin of net profit.

We have successfully concluded this article, we hope it will be very useful and although it is a bit tedious, it is important for your company.

Excel

How to convert a decimal number to binary with the DEC.A.BIN function in Excel

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How to convert a decimal number to binary with the DEC.A.BIN function in Excel

Excel is a Microsoft Office tool that is very useful for mathematical calculations, tables, and statistics. It contains many formulas and functions that are essential for its application and use in any environment and workspace.

One of them is the DEC.A.BIN function, which has a very particular use which is to convert decimal numbers into binary numbers. The specific utility can be noted in its name, with DEC as a decimal and BIN as a binary number.

Learn with us to use the DEC.A.BIN function in Excel step by step, to modify the numerical data that you use.

How to use the DEC.A.BIN function to modify numbers in Excel


This function works with two main concepts which are the numbers and the number of characters to make the change. Numbers are strictly required as opposed to characters, which is an optional factor for the job to be done.

The simplest way to use this function successfully is to put the following = DEC.A.BIN in the formula bar. This must be followed by the number or figure to be converted to binary, within parentheses.

It can also be used by placing the cell that contains the figure to be modified to binary instead of certain numbers. This value also has to be found within the mentioned parentheses for the function to do its job completely.

Another option is to place the number to change, followed by a semicolon, with the number of binary figures. As we mentioned earlier, the data has to be inside the parentheses for the function to process it successfully.

How to convert a decimal number to binary with the DEC.A.BIN function in Excel

It is important to know that requirements have to be met so that the function does not throw an error in the calculation. For this, the number must not be less than -512 or greater than 512, because the function will throw an error.

On the other hand, the function only works with numerical values, since when using words it also emits a final error. It also sets errors when there are inconsistencies with the character argument for the binary figure, which must be an integer.

If a negative number or zero is put as the argument, the function will also throw the error when applied. This also implies that the argument must be a numeric value, just like the number to be transformed later.

Now you can start using the DEC.A.BIN function to transform numerical figures into binary numbers, following the aforementioned parameters.

Some simple additional features that can be used in Excel

In some cases, the circular reference error can occur within a cell in Excel, due to poor development. This occurs because in the formula or function executed, the same cell that is occupying the sheet is placed.

When this type of error is made, the correct mathematical calculations cannot be performed in the Excel document. Despite these drawbacks, it is possible to work around the circular reference so that the formulas and functions work fully.

If you want to transpose a data series to a part of the sheet, it is also possible with certain specific steps. This is useful mainly so that we do not have to write all the data again in the specific order we want.

How to convert a decimal number to binary with the DEC.A.BIN function in Excel

This simple action can be done through a specific formula or using the computer keyboard and mouse. By transposing the information we save a lot of work time when we manipulate the data that we need to calculate or execute easily.

If you have applied for or granted loans, Excel allows you to calculate them with a specific function that the program can easily execute. This helps you manage and control all your finances much better and see the economic movements that you have made.

Excel is one of the most useful Office programs for businesses and institutions for many types of essential jobs. You have to take advantage of all these tools to facilitate various tasks and thus be able to streamline all the important processes when working.

You can find more information in See how to do it about other very useful and important functions and tools in Excel. We provide you with a lot of information about this and other topics that may interest you about technology, the Internet, and social networks.

How to convert a decimal number to binary with the DEC.A.BIN function in Excel

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How to Use the Excel Function BINOM.DIST SERIES – Step by Step

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How to Use the Excel Function BINOM.DIST SERIES - Step by Step

In this post, you will learn about how to use the BINOM.SERIES function of the Excel sheet, with a series of steps to follow.

Many people nowadays trust computers for multiple tasks, and among its most used programs is Excel, which can be used to create a form, create tables for different tasks or follow-ups, and even convert numbers to letters in a way. very simple.

It only takes a little practice and a lot of dedication, thanks to the fact that this Office suite program is very efficient for a myriad of tasks.

Anyone who wants to perform calculations quickly can be used for countless things, whether it be to keep company accounts, to keep records, or to make tables in which to keep a certain order. In this case, a step-by-step will be explained about one of the many statistical functions that Excel has.

Excel function BINOM.DIST SERIES

The code SERIES BINOMDIST is an Excel statistical function used to return the probability of a test result.

  • Its syntax is as follows: SERIES BINOMDIST (trials; probability-success; num-successes; [num-successes2]).
  • Trials. It is the total number of trials in numerical value.
  • Proba-success. It is the success of each test, a numerical value greater than or equal to 0 but less than or equal to 1.
  • Num-success It is the minimum number of successes in the tests to calculate the probability.
  • No.-success2. It is the maximum number of successes in the tests for which you want to calculate the probability.
How to Use the Excel Function BINOM.DIST SERIES - Step by Step

Step by step to use the function

To apply the DISTR. BINOM. SERIES, in the Excel program you must follow, at the bottom of the letters, the following steps:

  1. Select a cell where you want to see the result.
  2. Click on the icon that says “Insert function ∑“, which is located in the upper toolbar. Although there are two other ways to do it: Right-click on the selected cell and choose the function “Insert function” that appears in the menu. Press the icon that can be found in the formula bar.
  3. Select the group of statistical functions from the list.
  4. Click on the BINOM.DISTRY SERIES function.
  5. Enter the corresponding arguments separated by commas. (For understanding, the following values ​​will be used: 56-0,28-20-31).
  6. Hit the Enter button and the rest will be done by the program itself.

Note: The result obtained that returns the binomial distribution based on the probability of 31 successes out of 56 trials and a 28% probability of success. Therefore, the final result is 0.05038, but it can be interpreted as 5.038%. Which lets us know what the probability of success in the desired equation would be.

Similarly, the values ​​previously entered manually can be added one by one in a different box, then, when writing the function in the selected cell, you will simply have to select one by one the boxes with the necessary values ​​to perform the statistical function.

Either way, you can take a good look at the photo in case you got lost in any of the steps. At the same time, the following points must be taken into account before performing this function:

How to Use the Excel Function BINOM.DIST SERIES - Step by Step
  1. If a value set in the box is outside its limits (BINOM), the same formula will tell you #NUM! #VALUE!.
  2. If any argument written in the boxes is not numeric, what it will show will be the same result as the previous explanation.
  3. Excel itself is applying the following equation: N is the trials, p is Prob-success, s is Num-successes, s2 is Num-successes2, and k is the interaction variable.
  4. Numeric arguments are truncated to whole numbers.

Learning to use the Excel function BINOM.DIST SERIES is as simple as creating a monthly calendar. Using these tools requires concentration, nothing more.

The results will be as truthful as a computer and can be carried out within seconds, and you can even task in Excel will be more bearable, the only thing that should be taken into account, except that is You can use more than one formula, you have to be focused when entering the data so that they are not erroneous.

Since this tool reduces time to results, it is better to use it to get tangled up in a lot of numbers. Also, you can count that using Excel no result will go wrong unless the data entered is wrong.

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What is the syntax to use the DURATION.MODIF function in Excel?

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What is the syntax to use the DURATION.MODIF function in Excel

If you are learning or starting in the stock market it is necessary that you know some advantages of Excel that will surely be of great help; In this way, you can get the results of the calculations correctly and easily, such as using the DURATION.MODIF function.

In this sense, the DURATION.MODIF function in Excel is basically responsible for returning the annual duration; or also called Macauley, of a stock market value, which will be composed of a series of data or syntax to be able to get the information you are looking for.

When we refer to the syntax to use an Excel function, it indicates the order or arrangement and arguments; that is, they are data that we must enter correctly so that we can find the value, since otherwise, it will give an error, in this case, if you wish you can as a complement consult the Microsoft support help.

What is the correct syntax for the DURATION.MODIF function?

In this case, it is necessary to use the correct syntax in this way, the DURATION.MODIF function will be able to return the nominal value; then the arguments and correct order should be (settlement, expiration, coupon, yield, frequency [base]).

What is the syntax to use the DURATION.MODIF function in Excel

Likewise, to use formulas in spreadsheets it is necessary to have basic knowledge. In this way you will be able to load each of the data and thus use the correct and complete syntax as follows; DURATION.MODIF (settlement, maturity, coupon, yield, frequency [base]).

Settlement

Basically, we refer to the settlement date of the market value; In other words, it is the date after its issuance on which the buyer acquires the cost of the share of the economic title.

Expiration

In this case, it represents the expiration date of the stock; or also the exact time in which it will expire, either the economic title or share acquired by the buyer.

Coupon

The coupon is made up of numerical data that will be greater than or equal to 0; on the other hand, it will indicate what is the annual nominal interest rate of the stock market value; however, if a negative number is entered the function returns #NUM! Or if it is not numeric, it will show #VALUE! Error.

Performance

Regarding performance, in principle it should only be numerical data, also greater than or equal to 0; it also shows the annual profit rate of the stock market value. In case of being a negative number, it will show the code #NUM !, and if it does not have numbers, then it will give #VALUE! Error.

What is the syntax to use the DURATION.MODIF function in Excel

Frequency

It will always be necessary to know the importance of using spreadsheets since with them we can get the calculations quickly; as in this case where the frequency represents how many payments are made per year.

For example, if it is 1 it determines that it is once a year, that is, the payment is made annually; but if it is 2 then we speak semester or every 6 months and finally 4 which means quarterly, equally if the frequency is not calculated in 1, 2 or 4 it will give an error or if it is not numerical it will happen in the same way.

Base

The base will include an integer numerical value that this time will be greater than or equal to 0 and also less than or equal to 4; on the other hand, it will only indicate how the days will be counted and thus calculate the result.

What should you know about the DURATION.MODIF function?

Not everything in Excel is so complex, you can easily use other functions to calculate the average or any other data you need, but in the specific issue of DURATION.MODIF there are values ​​that you must take into account since otherwise, the information will not be correct.

All values ​​will be mandatory, settlement, maturity, coupon, yield, and frequency, less the basis; In this sense, it will not be necessary to calculate it, you only have to locate 0 and enter the numbers 1, 2, 3, or 4 taking into account the calculation according to the days established by each system.

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