Formula for calculating Profit margins

M

MrSparks

New Member
Joined
Oct 19, 2009
Messages
3
Hello All

I am currently using the following formula to calculate my profit margins on sales (where profit margin is defined as the percentage of the final selling price that is profit)

Margin=("Selling Price"-"Cost Price")/"Selling Price"

In the above, Selling Price and Cost Price are inputs in Currency, Margin is the output as a percentage.

I would like a formula that can calculate a final selling price from a Margin Percentage and the cost price (i.e. how much should I sell something for to make x% Margin) but I cant figure it out.

Any ideas?
 
Last edited:

Excel Facts

What did Pito Salas invent?
Pito Salas, working for Lotus, popularized what would become to be pivot tables. It was released as Lotus Improv in 1989.
Sort by date Sort by votes
Hi, If you invested £100 and returned £110 you would say:-
I made £10 on my original £100 i.e 10%
but not £10 on £110 = 9% surely !!!
Regards Mick
 
Upvote 0
Sadly, not the way the company does the math.

For instance, if we sold something, cost price £100, for £200, we would describe that as 50% margin.

In your example below, we would describe that as 9.09% margin.
 
Upvote 0
Hi, You right I was thing "Profit" Not "Profit Margin".
Does this make any sense.
Profit Margin = 10%, cost = £50
Therefore 90% x FSP = Cost
90/100 x FSP = 50
FSP = 50 x100/ 90 = 55.5555
i.e
55.555- 50/55.555 = Profit Margin = 10%
Regards Mick
 
Upvote 0
So, in order to make it variable, we could

Final Selling Price = "Cost Price" x (100/Margin)

Nice, thanks!
 
Upvote 0
You must log in or register to reply here.

Similar threads

L
  • Question
Formula for a sale price which has circular references
2 3
Replies
27
Views
992
felixstraube
F
S
  • Question
Gross Margin for contractors and subcontractors
Replies
2
Views
330
Sashtkd24
S
C
  • Question
Calculate units needed for price reduction
Replies
2
Views
305
Caly
C
J
  • Solved
Formula to calculate desired profit margin, Acurately without Solver
Replies
7
Views
971
6StringJazzer
6StringJazzer
M
  • Question
How to track multiple assets using one cell to input latest data
Replies
0
Views
56
micky6strings
M

Forum statistics

Threads
1,215,040
Messages
6,122,806
Members
449,095
Latest member
m_smith_solihull

Share this page

We've detected that you are using an adblocker.

We have a great community of people providing Excel help here, but the hosting costs are enormous. You can help keep this site running by allowing ads on MrExcel.com.
Allow Ads at MrExcel

Which adblocker are you using?

Disable AdBlock

Follow these easy steps to disable AdBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the icon in the browser’s toolbar.
2)Click on the "Pause on this site" option.
Go back

Disable AdBlock Plus

Follow these easy steps to disable AdBlock Plus

1)Click on the icon in the browser’s toolbar.
2)Click on the toggle to disable it for "mrexcel.com".
Go back

Disable uBlock Origin

Follow these easy steps to disable uBlock Origin

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back

Disable uBlock

Follow these easy steps to disable uBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back
Back
Top