Buzz
To determine whether current prices are increasing or decreasing, you need to calculate the cost-saving ratio. This straightforward calculation doesn’t require advanced algebra or calculus. You can either calculate it manually or use a spreadsheet program like Microsoft Excel. To calculate the cost-saving ratio, you need to know the current price, the discounted price, and the original price.
Steps
Calculate the cost-saving ratio manually
Determine the original price of the product/service. For most transactions, this is the listed price before any discounts or reductions are applied.
- For example, if the original price of a sweater is 500,000 VND, that is the original price.
- For hourly services, multiply the standard rate by the usual number of hours paid for.
Determine the new price of the product/service. This is the price after any promotional offers, discounts, or special deals have been applied.
- For instance, if you pay 400,000 VND for the sweater after a discount, the new price is 400,000 VND.
Calculate the price difference. To do this, subtract the new price from the original price.
- In the example above, the difference between the original price and the new price is 500,000 - 400,000 = 100,000 VND.
Divide the price difference by the original price. In this case, 100,000 / 500,000 = 0.2.
Multiply the decimal by 100 (or shift the decimal point two places to the right) to convert it into a percentage. Here, 0.2 x 100 = 20%. This means you saved 20% on the sweater purchase.
Calculate the cost-saving ratio in Microsoft Excel
Enter the original price of the product/service in cell A1 and press Enter. For example, if a computer's original price is 5,000,000 VND, you should enter "5000000" in cell A1.
Enter the final price after all discounts have been applied into cell B1 and press Enter. For example, if you paid 3,500,000 VND for the computer, enter "3500000" in cell B1.
Enter the formula "=A1-B1" into cell C1 and press Enter. Excel will automatically calculate the difference between the two prices and display the result in cell C1.
- In this example, if you enter the correct formula, the value displayed in cell C1 will be 1500000.
Enter the formula "=C1/A1" into cell D1 and press Enter. Excel will divide the price difference by the original price.
- In the example above, if you enter the correct formula, the value displayed in cell D1 will be 0.3. Note: Most Windows computers and Excel use a period as the decimal separator rather than a comma.
Click on cell D1 and press "CTRL+SHIFT+%". This is the Excel shortcut key to convert the decimal into a percentage.
- In this example, the value in cell D1 will be 30%. This means you saved 30% on the computer purchase.
Enter the new values in cells A1 and B1 to calculate the cost-saving ratio for a different transaction. Since you've already entered the formula in the previous cells, Excel will automatically update the cost-saving ratio whenever you change the original price, final price, or both.
- For example, if you just bought a lamp for 200,000 VND, while the original price was 400,000 VND, by entering "400000" in cell A1 and "200000" in cell B1, and keeping the other cells unchanged, the corresponding cost-saving ratio will show in cell D1 as 50%.
Things you need
- Original price and final price
- Calculator
Tips
- You may choose to include transaction tax when calculating the cost-saving ratio. As long as the tax remains consistent, the percentage of savings will remain the same.
