Enter the profit share received by the employee ($) and the total profit of the company ($) into the Profit-Sharing Ratio Calculator. The calculator will evaluate and display the Profit-Sharing Ratio.
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Profit-Sharing Ratio Formula
The following formula is used to calculate the Profit-Sharing Ratio.
PSR = PE / TP * 100
- Where PSR is the Profit-Sharing Ratio (%)
- PE is the profit share received by the employee ($)
- TP is the total profit of the company ($)
How to Calculate Profit-Sharing Ratio?
The following example problems outline how to calculate Profit-Sharing Ratio.
Example Problem #1:
- First, determine the profit share received by the employee ($).
- The profit share received by the employee ($) is given as: 2,500.
- Next, determine the total profit of the company ($).
- The total profit of the company ($) is provided as: 100,000.
- Finally, calculate the Profit-Sharing Ratio using the equation above:
PSR = PE / TP * 100
The values given above are inserted into the equation below and the solution is calculated:
PSR = 2,500 / 100,000 * 100 = 2.5 (%)
Example Problem #2:
For this problem, the variables required are provided below:
profit share received by the employee ($) = 5,000
total profit of the company ($) = 150,000
Test your knowledge using the equation and check your answer with the calculator above.
PSR = PE / TP * 100 = ?
