# Enter a Formula in The Selected Cell to Display The Owner’s Draw Percentage (Cell B6): How To Calculate

## Enter a Formula in The Selected Cell to Display The Owner’s Draw Percentage (Cell B6)

As an experienced blogger with a knack for simplifying complex concepts, I’m excited to dive into the world of Excel formulas. We’ll specifically focus on how to enter a formula in a selected cell to display the owner’s draw percentage. This is a handy trick for all you business owners out there who need a quick and easy way to keep track of your financials.

Excel is more than just a spreadsheet tool – it’s a powerhouse for data analysis and financial tracking. With the right formula, you can turn a simple cell into a dynamic display of your business’s financial health. No need to be an Excel wizard, I’ll guide you through each step, ensuring you understand the process.

In this article, we’ll be working with cell B6. The goal is to use this cell to display the owner’s draw percentage. This is an essential figure for any business owner, as it represents the proportion of profits you’re taking from your business. So, let’s dive in and learn how to make Excel do the heavy lifting for us.

## Understanding Owner’s Draw Percentage

As we delve deeper into the intricacies of Excel, it’s vital to comprehend what we’re tracking. Let’s illuminate the concept of the owner’s draw percentage.

### What is Owner’s Draw

In simple terms, an owner’s draw or simply ‘draw’, is a portion of business profits that a business owner takes out from their company’s earnings. Whether you’re a sole proprietor, in a partnership, or running an LLC, you might resort to an owner’s draw to cover personal expenses.

Unlike an employee salary, an owner’s draw is available at any time, as long as there’s sufficient profit in the business. It’s registered under the owner’s equity in the company’s account to ensure precise bookkeeping.

### Importance of Owner’s Draw Percentage

Calculating the owner’s draw percentage gives you a precise picture of your monetary extraction out of the business. It’s represented as a percentage of total profits you, as a business owner, are drawing for personal use. This percentage directly affects business growth, making it strategically important to monitor.

It can pinpoint whether your draw is too high or in line with your business’s health. A high draw percentage might indicate your business doesn’t have enough funds to reinvest or cover potential downturns. On the other hand, a low draw can signify either a flourishing business, capable of growing on minimal owner draws, or an overly pessimistic owner, missing out on warranted personal income.

As we progress with our Excel tutorial, remember that these percentages aren’t just random numbers we’re feeding into B6. They’re indicative of the lifeline of your business. Being aware of these figures can make a monumental difference in your business strategy and planning.

In the next section, we’ll see how we can use Excel to calculate the owner’s draw percentage, offering you valuable insights as you decode your business’s profitability. Stay tuned as we unraveled why Excel is a crucial tool for business financial tracking.