# How do I calculate daily profit in Excel?

Also known as a cumulative sum, a running total is a commonly used function within the educational and business world.The process of creating a running total in Excel involves thre

- Also known as a cumulative sum, a running total is a commonly used function within the educational and business world.
- The process of creating a running total in Excel involves three simple steps.
- Running totals are used in retail stores, for sales and at sporting events, to name a few applications.
**This article is for business owners and professionals who want to learn how to create a running total in Microsoft Excel.**

Creating a running total (or cumulative sum, as it is known in Excel) is easy once you get the hang of it. Many business owners use cumulative sums to keep track of expenses and revenue, employee hours and inventory management.

The idea behind a running total is to take a column of numbers and, next to it, show the running total of those numbers. You can use both positive and negative numbers in a running total, so you can put your sales and withdrawals together if you like.

**What is a running total?**

A running total, or cumulative sum, is a sequence of partial sums of any given data set. A running total is used to display a summary of data as it grows over time. This very common technique is used daily by students and professionals tasked with using Excel to compute and calculate an array of complex data and equations. Additionally, having a running total can save you from taking the time to record the sequence itself if its not vital to know the individual numbers being used.

## How to create a running total in Excel

**1. Start with =SUM. Click on the cell where you want your running total to begin. Next, select the SUM function on that cell.** But instead of highlighting cells within the parentheses (by dragging the cursor over the cells you want to include in the equation) as you would if you were adding a column of numbers, you need to create whats called an absolute reference, followed by a relative reference. Dont worry; its not as complicated as it sounds. The next step covers how to do it.

**2. Create a running total formula. **You must use the dollar sign in this formula, even if the numbers youre tallying are not dollar amounts. In our sample Excel workbook, lets say you want a cumulative total posted in column C. In cell C1, you would type =SUM($B$2:B2). This creates the necessary relative reference point (B2) and absolute reference point ($B$2) for your running tally.

What are these references? Relative reference points can change when you copy and paste a formula from one place to another. For instance, if you copy a formula two rows to the right, the relative reference point will shift two rows to the right. Absolute reference points dont change when copied.

3. **Click the bottom-right corner of the cell with the formula in it.** Then drag down as far as you want the running total to apply. When the formula is dragged down, the absolute reference point, $B$2 stays the same. The relative reference point B2 changes as far as you drag your cursor down to B3, B4, B5, etc.

For example, if you have a March sales value of $500, an April sales value of $650 and a May sales value of $700, youll enter these values under a sales column. To gain the running total, youll enter $500 in the top right column and use the formula above to calculate the running total. Next, youll drag your cursor down to encompass April, May and June sales. The running total will then display $500, $1,150 and $1,850, respectively. Then youll have a running total you can add more monthly sales values over time. Thats all there is to it.

## What are some uses for a running total?

While this calculation may sound a tad complex, it is actually a rather common concept that many of us come into contact with regularly, regardless of whether we are the ones using it. Here are some of the uses for a running total:

**Cash register operations.**

One of the most common examples of running totals that you are regularly exposed to involves the use of cash registers. In particular, cash registers display a running total of various products as they are scanned into the system. Additionally, they typically keep a running total of all transactions being made throughout the day.

A cash register can house a reporting function that shows running totals of everyday functions in the store, including the number of customers at certain times of the day and the most popular items either of the day or all time, depending on the category. Using a running total allows retail stores the chance to identify trends among customers and better their operations.

**Game scoreboards.**

Another common application of running totals is the scoreboards at sporting events. Although you see every point as it hits the board to understand how the end score is calculated, in the end, the final score is the only number that matters. Additionally, the game of cricket, in particular, is a great example of a running total. Each time a player scores a run, it is added to the total. Therefore, the total score is simply a running total or summation of the runs.

**Sales positions**

If you work in the sales sector, you are likely exposed to various running totals. For instance, if you have a quota, you may be using a running total to keep track of your progress until your quota has been reached. This is also true in other industries such as telecommunications or banking, where the number of sales, new clients, and products sold can relate to job performance.

Managers can use these running totals to evaluate this performance monthly, quarterly or yearly. These running totals can also determine real performance against targets over time. This data can then be used to troubleshoot what is required to change when targets are not met.

**Year-to-date calculations**

One of the top uses of running totals is year-to-date calculations. A year-to-date (YTD) calculation is used to record a certain function or activity (usually financial) from a certain date to the end of the year.

For instance, you may see an array of year-to-date calculations on your pay stubs. This is an example of a running total because it keeps track of the various payments made and taxes collected to give you a final total at the end of each year. These final totals are then transferred onto W-2 forms and used for tax purposes. Year-to-date calculations are also used to calculate rental income, the financial standing of a business or a stock return.

**Inventory totals**

Another common use of running totals is the method a company uses to keep track of inventory. Companies must record the number of items sold and compare that number to how many items they have in stock, so this is an example of a running total. For instance, if you have 1,000 cookies in stock at the beginning of the week, every sale would be subtracted from the overall stock and result in a new total after each transaction.

**Balance sheets.**

If you have a job that uses balance sheets, this can also be an example of a running total. Balance sheets can also show you a clear picture of any assets and liabilities at one point in time. Balance sheets allow you to keep an itemized list of things such as expenses. After new items are added, you get a new total.

**Bank balances**

Your bank statement gives you an itemized list of what is being deposited and paid out every month. After each transaction, you get a new total. When you go online to view your account, you will see your running total.

**Gas mileage**

Ride-sharing companies and delivery services also employ running totals. Given that drivers are often paid by the mile, a running total keeps track of how much a person should be paid. This is also true when creating expense spreadsheets if you have to travel multiple days for work.

**Calorie counts**

Running totals can also be used to count your calories throughout the day or week. People who use a caloric count to lose weight can use an app or create a spreadsheet that allows them to input the calorie count of each meal to calculate days or weeks worth of calories ultimately. The app or spreadsheet will start with zero calories and create the running total dependent on what they eat.