To estimate, use the following formula:
T$ x (GM – C) x (1 – T)
Where:
· T$ is the value of Tradebank Dollars you expect to earn and spend by trading via the Tradebank Network.
· GM is your company’s gross margin of profit
(gross profit divided by sales).
· C is the Tradebank commission charged for buying and selling products and services.
· T is the applicable tax rate for your company.
For example:
· T$ = 200,000
· GM = 70%
· C = 10% (0.0% for each sale and 10% for each purchase)
· T = 40%
Thus, the additional cash that this business can expect to generate is:
200,000 x (.70 – .10) x (1 – .40) = $72,000
