Excel Formula: Solve for X where Y * Z% = X, Y and Z are known

Question

That was probably a terrible title.

I have required after tax revenue and the expected effective tax rate, I need to know how to calculate the gross revenue required to meet the after tax revenue when the tax rate is factored.

Example

I need 100K in revenue to pay all company expenses. The tax rate of the company is going to be 20%. How do I figure out how much revenue I must have, in order to have 100K after 20% is taken out.

Or more specifically, how do I express that in an Excel formula.

Answer 1

Sounds like a gross margin calculation. Here's a utility I give to my staff, for you the 3rd section should be relevant. Hope this helps

Answer 2

I think the problem is with your maths, though your Title is incorrect (despite giving a reasonable indication of your requirement!)

Using X as your unknown, Y as % (expressed as a decimal, so 20% is 0.2) and Z as the outcome (100) you could use Solver, as shown:

But this is overkill for what is solvable with a formula. The relationship can be expressed as:

X – X * Y = Z

and that can be rearranged as below:

X(1-Y)=Z
X=Z/(1-Y)

With the values in your example:

X=100/(1-0.2)
X=100/0.8

So with Y and Z in the cells as shown in blue, X may be derived with =C4/(1-B4) (shown in A4).