Can an Excel formula be constructed to 'factor in' inflation rates.

[James Perry]

All of us are familiar with Cost of Goods Sold or COGS.
Very simply put:
Sales Revenue - COGS = Gross Margin.
'What-If' analysis can help look at different Gross Margin (GM) scenarios and also forecast
different Net Profit scenarios by changing variables like Sales Revenues.
In addition to the above, can Excel also consider the current economic scenario and
'factor in' periodic interest rates before forecasting GM numbers?
So, how can an Excel formula be constructed to forecast gross margin AND at the same time
'factor in' inflation rates in order to give a more 'realistic' GM number.
In this regard, Excel formulas/Links will be greatly appreciated.
Many thanks.

 

[Faseeh]

I think you simply need to multiply GM with (1-inflation rate) like say for 10% inflation, the GM should be reduced by 10% or

GM x 0.9

 

[James Perry]

Thank you, Faseeh. That is so perfect.