Calculator for Allowable Profit for For-Profit Agencies Which Provide Client Care
Wis. Stat. 46.036 (3) (c) indicates that contracts for proprietary agencies may include a percentage add-on for profit
according to the rules promulgated by the department. These requirements are in the
Allowable Cost Policy Manual, which
indicates that allowable profit is determined by applying a percentage equal to 7 1/2% of net allowable operating costs plus 15%
applied to the net equity, the sum of which may not exceed 10% of net allowable operating costs. Net equity is defined as the
cost of equipment, cost of buildings, cost of land and cost of fixed equipment less accumulated deprecation and long term
liabilities. The average net equity for the year shall be used.
We developed a calculator in Excel format which can be used to calculate the allowable profit for a for-profit agency which
provides client care. We would appreciate feedback on how well this method works.
Allowable profit calculator (Excel, 19 KB)
Allowable profit calculator (PDF, 11 KB)
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Last Revised: July 12, 2010