Calculate Revenue to meet a target margin

bark01

Board Regular
Joined
Sep 6, 2006
Messages
135
Office Version
  1. 365
Platform
  1. Windows
I know this is the kind of question that will leave me kicking myself, but i'm having a mind blank...

I want to know what i need to set my revenue at to hit a target margin (the target margin is a cell that will be editable).

The formula I came up with is


(Z13*(1+$AP$11))-'Pricing Data Original'!K13)/'Pricing Data Original'!K13)

Or

(Unit Cost*(1+Target Margin))-Current unit revenue)/'current unit revenue)

If I enter 50% as target margin it sets the revenue at 150% of Cost which = a margin of 33%, Setting the Target to 100% sets the revenue to 200% of the cost which equals a margin of 50%

Clearly what I've done is created a target profit not margin, but I can't work out how to convert it to a target margin.

any ideas

thanks
 

Excel Facts

VLOOKUP to Left?
Use =VLOOKUP(A2,CHOOSE({1,2},$Z$1:$Z$99,$Y$1:$Y$99),2,False) to lookup Y values to left of Z values.
I think what you are looking for is:
Code:
= cost / (1-margin)

where your margin is a percentage.

Hopefully you can work it out from this.


Cheers,
 
Upvote 0
Sell Price = 1/(1-Target Margin) * Cost

Markup = 1/(1-Margin)
133% = 1/(1-25%)

Margin = 1 - 1/Markup
25% = 1 - 1/133%
 
Upvote 0

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