Calculation details for Simbu

Step #1 - Historical movie details for Simbu

No Movie Year Tamilnadu Collection Domestic Collection Overseas Collection Total Collection
1 Vaalu 2015 15.20 17.20 5.20 22.40
2 Idhu Namma Aalu 2016 17.50 20.15 5.83 25.98
3 Achcham Yenbadhu Madamaiyada 2016 24.00 28.25 10.23 38.48

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 Vaalu
Vaalu release year
2015
2015 CPI value
147.6569875
Current CPI value
156.235504088
India collection in 2015
17.20 Cr
Inflation adjusted collection
(156.235504088 / 147.6569875 ) * 17.20 = 18.20Cr
Example overseas calculations for Vaalu
Vaalu 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
5.20 Cr = 5.20/64.20012 = $0.81MM
Present value of collection USD
(112.86148554565 / 108.695722 ) * 0.80996733339439 = $0.84 MM
Present value of collection INR
$0.84MM * 67.69355 = 5.69 Cr

Total Vaalu collection in 2015 = 17.20 + 5.20 = 22.40 Cr

Present value of Vaalu collection = 18.20 + 5.69 = 23.89 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 Vaalu 2015 16.08 18.20 5.69 23.89
2 Idhu Namma Aalu 2016 17.64 20.31 6.01 26.32
3 Achcham Yenbadhu Madamaiyada 2016 24.19 28.48 10.55 39.03

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 Vaalu 2015 23.89 1.00 23.89
2 Idhu Namma Aalu 2016 26.32 1.00 26.32
3 Achcham Yenbadhu Madamaiyada 2016 39.03 1.00 39.03
Total 3 89.25

Total expected collection for Simbu = 89.25/3 = 29.75 Cr