5.4.3 Export Earnings出口利润

5.4.3 Export Earnings出口利润

Two formulas are commonly used to see whether you make money through a transaction,and if you do,how much the profit margin is.

♦Exchange cost for export出口换汇成本

If you quote the price and sign the contract in US dollar,a quick test tells whether you gain or lose from an export deal through the following formula:

Exchange cost for export is the total cost for export in RMB spent in return for one US dollar,therefore,it can also be interpreted as “export cost per dollar”.For a trading company like yours,the “total cost for export in RMB”in the nominator is the one we developed in 5.4.1.4,while the “total net revenue in USD”in the denominator takes the FOB net revenue in US dollar.Then you compare the result with the current exchange rate between USD and RMB.If the result is smaller than the exchange rate,the transaction makes a profit; otherwise,it is at a loss.Based on this result,you may adjust your price quoted to the importer and repeat this procedure until you come up with a price that can bring you a satisfying profit.

♦Profit margin for export出口利润率

You may use the following formula to calculate your profit margin of an export deal: