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Recording purchases

Calculate a car flip result from purchase and sale costs

Use a worked example to calculate a vehicle’s recorded profit and return on cost. Keep sale targets, estimates and actual proceeds separate.

To calculate a completed vehicle flip’s recorded result, subtract the purchase amount and recorded costs from actual sale proceeds. Before sale, the same calculation using a target price is only a planning estimate. Keep those two states separate so an unsold car does not appear to have earned money.

Start with the amounts actually recorded

Use one currency and list the purchase amount plus each expense attributed to that vehicle. Include repairs, transport, inspection and preparation where they apply. Check that a workshop bill or collection cost has not been entered twice.

The basic calculation is:

Recorded result = sale proceeds - purchase amount - recorded costs.

This describes your entered record. It does not establish that every business expense, tax or personal cost has been included.

Work through an example

Entry Illustrative amount
Purchase 8,000
Inspection 150
Transport 250
Repairs 700
Preparation 100
Total recorded investment 9,200
Completed sale 10,500
Recorded result 1,300

All amounts use the same currency. Return on recorded investment is 1,300 divided by 9,200, or about 14.1 percent. That is different from margin as a percentage of sale proceeds, which would be about 12.4 percent. Label the measure rather than calling both numbers “profit percentage”.

Test a less favourable outcome

If an additional repair costs 600, recorded investment rises to 9,800 and the result falls to 700 at the same sale price. If the final selling price is also 500 lower, the result becomes 200. Small changes can therefore matter even when the original asking-price gap looked large.

Before purchase, use this kind of scenario to identify which unknowns deserve investigation. Do not turn an estimated resale value into a guaranteed exit price.

Use the register to close the record

Autofindr distinguishes missing sale proceeds from a recorded amount. Enter the actual sale date and proceeds when the transaction is complete, then check the cost ledger. A target sale price helps with planning but is not a completed sale.

Keep different currencies in separate records and do not add them into one unexplained total. Export the vehicle record for further analysis if needed. The register helps calculate from your inputs; the completeness and accuracy of those inputs remain essential.

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