Q: Please repeat the equations for the Columns requiring calculation on the Contract Status / Work in Progress Report.
A: The equations for Columns C, F, G, H, and I are as follows:
- Column C: Earned Revenues = Billings to Date + (Over)/Under Billings.
- Column F: (Over)/Under Billings = Earned Revenues – Billings to Date
- Column G: Percent Complete = Actual Cost to Date / Total Cost Anticipated
- Column H: Gross Profit Percent = Gross Profit Amount / Earned Revenues
- Column I: Gross Profit Amount = Earned Revenues – Actual Cost to Date
Please note that Earned Revenue is an estimate by the contractor of the sum of costs and profit at a specific point in time for an incomplete contract. Earned Revenue can only be verified at the completion of the contract, or project, when all final costs are identified and can be measured against the final contract amount.
Course overview: Understanding and Analyzing Contractor Financial Statements: Part I of II