Profit Calculation

This section breaks down how profit is calculated for a pool. The calculations are performed for each monthly profit calculation cycle.

Calculating the Pool's equivalent rate

1. Distributed income: The sum of all income generated from the assets in the investment pool for profit calculation cycle.
2. Distributed expenses: The sum of all direct expenses incurred in managing the investment pool for the cycle for profit calculation cycle.
3. Distributable profit amount: The gross profit for profit calculation cycle.

Formula
Distributable Profit amount = Distributed Income -  Distributed Expenses

3. Aggregated account balance: The sum of the average eligible balances from all accounts participating in the pool during the profit calculation cycle.
4. Equivalent rate %: The annualized profit rate for the investment pool. This rate serves as a benchmark for distributing profit distribution to each account.

Formula
Equivalent Rate %= (Distributable Profit * Days in Year) / (Aggregated Account Balance * Days in Cycle) * 100

5. Mudarib share account balance: The balance of the Mudarib share general ledger account on the first day of the cycle, used for profit adjustments.
6. Reserve account balance: The balance of the reserve general ledger account on the first day of the cycle.

Calculating total accrued profit amount

The total accrued profit amount is the sum of the accrued profit amounts calculated for all individual products and accounts within the pool during the profit calculation cycle.

1. Total bank share amount: The bank's total share of the accrued profit. It is derived by calculating the allocated portion from each account in the pool for the profit calculation cycle.
2. Total Mudarib amount: The total value of all profit adjustments made across all accounts. It is derived by calculating the difference between the initial profit amount and the final profit amount, after adjustments, for every account in the pool for the profit calculation cycle.

Calculating total final profit amount

The total final profit amount is the sum of the final profit amounts calculated for all individual products and accounts within the pool during the profit payment cycles.

1. Total bank share amount: The bank's final, total share of the profit after all adjustments have been applied across all accounts in the pool for the profit payment cycles.
2. Total Mudarib amount: The total value of all profit adjustments made across all accounts. It is derived by calculating the difference between the initial profit amount and the final profit amount, after adjustments, for every account in the pool for the profit payment cycles.

Product profit calculation result

1. Product: The name of the product and the number of accounts in a product.
2. Profit rate: The percentage of a portion of the Pool profit amount for a product.
3. End of calculation cycle: The profit calculation result for the profit calculation cycle (not full payments cycles).

• Aggregated account balance: The average of eligible account balances during the profit calculation cycle period.
• Total bank share amount: The bank's final, total share of the profit after all adjustments have been applied across all accounts in the pool for the profit payment cycles.
• Total accrued profit amount
• Total Mudarib amount

5. End of payment cycles: Profit calculation result for profit payment cycles. Payment cycle depends on account activation date. Payment cycle might be not equal to profit calculation cycle, when Product/Account has profit calculation frequency = Monthly and account activation date is any date except the first day of the month.

• Aggregated account balance: The average of eligible account balances during profit calculation cycle period
• Total bank share amount: The total profit earned by the bank from a customer account for the profit calculation cycle for profit calculation period
• Total final profit amount: The total profit earned by the account for the profit calculation cycle before profit adjustment
• Total Mudarib amount: The total value of all profit adjustments made across all accounts in the product. It is calculated by taking the difference between the final profit amount after adjustments and the initial profit amount before adjustments for every account in the product, for the duration of the profit payment cycles.

Account profit calculation result

1. Account ID: The ID of account in the system.
2. State: The Real deposit account state.
3. Profit rate rule: tTe value defined at the Product level.
4. Profit rate from rule: The value defined at the Product level.
5. Capped rate: The value defined at the Product level.
6. Minimum eligible balance: The value defined at the Product level.
7. End of calculation cycle: The profit calculation result for the profit calculation cycle (not full payments cycles).
   • Number of days: The number of the days in the period from the start of payment cycle until the end of calculation cycle.
   • Profit calculation cycle end date: The end date of the calculation cycle period.
   • Eligible account balance: The average of eligible account balances during profit calculation cycle period.
   • Customer share percentage: The value defined at Product level. This parameter is fixed on the last day of the profit calculation cycle and will never be recalculated.
   • Customer profit rate: The profit rate applicable to the customer account.

Formula
Customer profit rate = Pool's Equivalent Rate * Customer share percentage

• Customer share amount: The total profit earned by the account for the profit calculation cycle before profit adjustment.

Formula
Customer share amount = (Customer profit rate * Eligible account balance * Days in Cycle) /  (Distributable Profit × Days in Year)

• Bank share amount: The total profit earned by the bank from a customer account for the profit calculation cycle for profit calculation period.

Formula
Bank share amount = (Account pool's last equivalent rate * Number of days in the profit calculation cycle * Account's aggregated account balance for the profit calculation cycle period)  / (Days in year - Customer share amount)

• • Customer profit rate after adjustments: The account's profit rate after comparison of calculated profit rate by the system vs profit rate rule defined at product level.
• Accrued profit amount: The total profit earned by the account for the profit calculation cycle before profit adjustment.

Formula
Accrued profit amount = (Customer profit rate after adjustments * Eligible account balance * Days in Cycle) /  (Distributable Profit × Days in Year)

• Mudarib share amount: The total profit earned by the account for the profit calculation cycle before profit adjustment.

Formula
Mudarib share amount = Final profit amount - Customer share amount

8. End of payment cycles: The profit calculation result for profit payment cycles. Payment cycle depends on account activation date. Payment cycle might be not equal to profit calculation cycle, when the Product or Account has the profit calculation frequency of Monthly and the account activation date is any date except the first day of the month.
   • Number of days: The number of the days in the payment cycle period.
   • Profit payment cycle end date: The end date of the payment cycle period.
   • Eligible account balance: The average of eligible account balances for profit payment cycle period.
   • Customer share percentage: The value defined at product level. If the product uses a tiered system, this percentage can change if the customer's eligible account balance moves into a different tier. The percentage is finalized on the last day of the profit payment cycle. This ensures that any significant balance changes occurring after the profit calculation cycle are accounted for before payment. Once this percentage is finalized for a payment period, it will not be changed or recalculated for that period.
   • Customer profit rate: The profit rate applicable to the customer account. If the product uses a tiered system, this percentage can change if the customer's eligible account balance moves into a different tier. The percentage is finalized on the last day of the profit payment cycle. This ensures that any significant balance changes occurring after the profit calculation cycle are accounted for before payment. Once this percentage is finalized for a payment period, it will not be changed or recalculated for that period.

Formula
Customer profit rate = Pool's Equivalent Rate * Customer share percentage

• Customer share amount: The total profit earned by the account for the profit calculation cycle before profit adjustment. If the product uses a tiered system, this amount can change if the customer's eligible account balance moves into a different tier. The amount is finalized on the last day of the profit payment cycle. This ensures that any significant balance changes occurring after the profit calculation cycle are accounted for before payment. Once this amount is finalized for a payment period, it will not be changed or recalculated for that period.

Formula
Customer share amount = (Customer profit rate * Eligible account balance *  Days in Cycle) /  (Distributable Profit × Days in Year)

• Bank share amount: The total profit earned by the bank from a customer account for the profit payment cycle.

Formula
Bank share amount =  (Account pool's last equivalent rate * Number of days in the profit payment cycle * Account's aggregated account balance for the profit payment cycle period)  / (Days in year - Customer share amount)

• Customer profit rate after adjustments: The account's profit rate after comparison of calculated profit rate by the system vs profit rate rule defined at product level.
• Final profit amount: The total profit earned by the account for the profit calculation cycle before profit adjustment.

Formula
Accrued profit amount = (Customer profit rate after adjustments * Eligible account balance * Days in Cycle) /  (Distributable Profit × Days in Year)

• Mudarib share amount: A negative value indicates that the profit paid to the customer is lower than the calculated amount; hence the difference will be stored under the Pool’s Mudarib Share Account balance. A positive value indicates that the profit paid to customer is higher than the calculated amount, hence the difference will need to be taken from the Pool’s Mudarib Share Account balance.

Formula
Mudarib share amount = Final profit amount - Customer share amount

• Withholding tax amount: The tax amount applicable for an account.

Formula
Withholding tax amount =  Final profit amount * Withholding tax rate