Calculation details for Ram

Step #1 - Historical movie details for Ram

No Movie Year Tamilnadu Collection Domestic Collection Overseas Collection Total Collection
1 Pandaga Chesko 2015 25.00 27.50 1.30 28.80
2 Nenu Sailaja 2016 27.50 30.90 5.00 35.90
3 Hyper 2016 19.70 22.30 1.00 23.30

Step #2 - Adjust collections based on inflation rate

We all know that movie ticket prices aren't what they used to be. The cost of consumer goods and services rise each year. So, taking inflation into account is the only way to meaningfully compare the box office collection of movies over time. Ideally we should use India inflation rate for adjusting box office collection in India and inflation rate from respective countries for overseas collection. For simplicity, our calculations assume US inflation rate as the basis for adjusting the box office collection of all overseas countries. We also take into account the currency rate change over a period of time to accurately calculate the present box office collection values of historical movies.

Step #2a - Collect data to calculate inflation (courtesy www.worldbank.org, www.wikipedia.org/)

Year India Inflation Rate India CPI (Consumer Price Index)
2015 5.872426595 147.6569875
2016 4.97 154.99553977
2017 0.8 156.235504088
Year US Inflation Rate US CPI (Consumer Price Index)
2015 0.118627136 108.695722
2016 1.3 110.108766386
2017 2.5 112.86148554565
Year Average US Dollar to Indian Rupees Exchange Rate
2015 64.20012
2016 67.26527
2017 67.69355

Step #2b - Apply inflation

Present box office collection value of historical movies is calculated by using a simple formula:

Collection(y) = ( CPI(y) / CPI(x) ) * Collection(x)

where "x" represents historical CPI and box office collection values and "y" represents current values.

Example domestic calculations for Pandaga Chesko
Pandaga Chesko release year
2015
2015 CPI value
147.6569875
Current CPI value
156.235504088
India collection in 2015
27.50 Cr
Inflation adjusted collection
(156.235504088 / 147.6569875 ) * 27.50 = 29.10Cr
Example overseas calculations for Pandaga Chesko
Pandaga Chesko release year
2015
2015 CPI value
108.695722
2015 USD to INR exchange rate
64.20012
Current CPI value
112.86148554565
Current USD to INR exchange rate
67.69355
Overseas collection in 2015
1.30 Cr = 1.30/64.20012 = $0.20MM
Present value of collection USD
(112.86148554565 / 108.695722 ) * 0.2024918333486 = $0.21 MM
Present value of collection INR
$0.21MM * 67.69355 = 1.42 Cr

Total Pandaga Chesko collection in 2015 = 27.50 + 1.30 = 28.80 Cr

Present value of Pandaga Chesko collection = 29.10 + 1.42 = 30.52 Cr

Step #2c - Calculate present value of collection based on inflation for all movies

No Movie Year Inflation Adjusted Tamilnadu Collection Inflation Adjusted Domestic Collection Inflation Adjusted Overseas Collection Inflation Adjusted Total Collection
1 Pandaga Chesko 2015 26.45 29.10 1.42 30.52
2 Nenu Sailaja 2016 27.72 31.15 5.16 36.30
3 Hyper 2016 19.86 22.48 1.03 23.51

Step #3 - Calculate expected collection based on weightage

For calculating expected collection for an actor, we give appropriate weightage to the movies based on several factors. The weighted average is used to calculate the expected collection of an actor.
No Movie Year Inflation Adjusted Total Collection Weightage Collection * Weightage
1 Pandaga Chesko 2015 30.52 1.00 30.52
2 Nenu Sailaja 2016 36.30 1.00 36.30
3 Hyper 2016 23.51 1.00 23.51
Total 3 90.34

Total expected collection for Ram = 90.34/3 = 30.11 Cr