Hi John,

Thanks for the reply €” I'll keep it simple:

Net Sales 200,000 (or whatever)
Cost of Sales will always be 30% of Sales
Gross Margin = Sales - Cost of Sales
Operating Expenses fixed in this scenario
Income Before Taxes = Gross Margin - Operating Expenses

** Need to determine level of sales to realize an Income Before Tax of, say,
5%... Obviously, I could use Goal Seek, but really need it as a formula.


Thanks a lot.


"John Bundy" wrote:

There are a lot of variables that go into profitability by percent of sales,
the main being profit margin, you would need to A. have only one item B. do
an average or C. Do a calculation for each sale, but this can all be done,
just need to know how you calculate

-John

"JEFF" wrote:

I know how to determine breakeven, and I know how to solve for a targeted
profit level. What I can't get my head around is how I solve for a targeted
profitability in terms of a percentage of sales........... I can provide an
example, but in the meantime, I thought maybe someone else has been down this
road.

TIA!