Formula for calculating Profit margins

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MrSparks

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Oct 19, 2009
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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?
 
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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!
 
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