Profit-Sharing Ratio Calculator

Formula

The formula to calculate the Profit-Sharing Ratio (PSR) is:

\[ PSR = \frac{PE}{TP} \times 100 \]

Where:

$ PE $ is the profit share received by the employee ($).
$ TP $ is the total profit of the company ($).

Example

Let's say the profit share received by the employee ($ PE $) is $5000 and the total profit of the company ($ TP $) is $100,000. Using the formula:

\[ PSR = \frac{5000}{100000} \times 100 = 5\% \]

So, the Profit-Sharing Ratio ($ PSR $) is 5%.

What is Profit-Sharing Ratio?

The profit-sharing ratio is a metric used to determine the percentage of total company profit that is allocated to an employee as their profit share. It helps in understanding the distribution of profits within a company and can be used to assess the fairness and effectiveness of profit-sharing schemes.