I noticed that some numbers arent matching on the profit plan. Including a snapshot below
My question also is how is the profit goal number reached? This is not explained and I am not sure how to calculate it without doing some backwards math. Is there a formula we aren’t given, or a percentage we dont know?
[ screenshot removed ]
Welcome to the Black Spectacles Community @neftalihernandezjr! Thanks for writing in with your question. These specific numbers aren’t supposed to match - it’s important to remember that with the Profit Plan, the top, middle, and bottom sections are different parts of the exercise and, when considered together, help to plan for profit for the year. It is ultimately a planning exercise, so there are rounding and assumptions built in. 694,359 is coming from to top section, and of that number, 500,000 is direct labor (~72%) and the remainder is indirect labor of 194,359 (~28%). These percentages are rounded, which is why they may not calculate exactly. Hope this helps!
Also just a heads up - I will be removing the screenshot from your post as we do not allow our paid content to be shared.
Kiara Galicinao, AIA, NCARB
Product Coordinator
Black Spectacles
Sorry about the screenshot.
I am still confused then on how you complete the bottom section. Or what the steps are to completing the bottom section. I understand the top and middle section. Also how is the profit goal number calculated? Where does that come from? Or how do you reach that number? Is it another percentage, if so, what is it a percentage of?
@neftalihernandezjr Sorry I missed the second part of your question! The profit goal (bottom section) is carried down from the net profit calculated in the middle section. For more information about and practice with the Profit Plan, check out The Architect’s Handbook of Professional Practice, 15th Edition, pages 438-443 and Real-World Practice: Evaluating a Firm’s Financial Metrics [Exercise B].
Kiara