Hi, I am helping a friend do a calculation and just want to double check with you guys: I need to know how to do a formula for the following: Working out profit margins as a percentage So for example; Cost price is £1 RRP is £3 Profit margin is 60.83% Also, if the profit margin is set at say 60% i need a formula to calculate what the RRP should be. e.g. Cost Price is £5 RRP is ? Profit Margin is 60% So what formual would I use for this? Thanks Harry

Assuming that you are working with financial software you can use a command like Excel has "goal seek" which allows you to alter figures at will.

I dont' get that number. Is it not 66.67%? (RRP - Cost) / RRP = Profit Margin Therefore, RRP = Cost / (1 - Profit Margin) So, in this instance RRP = 5 / .4 = £12.50 Hope this helps, Steve

The most common calculation most retailers work on is: Retail ex VAT margin: ((selling-vat)-cost)/(selling-vat) if you want 60% margin (if my memory serves me right): (selling-vat)*40% (or.4) Steve, the calculation used by the OP is (3-1)/3, which doesnt actually show much, but is the same as your (RRP - Cost) / RRP = Profit Margin, shown as a %. ((3-VAT)-1)/3 would give the inc VAT margin

I am sure markup has to be more of a percentage than the gross profit you want to achieve. We always mutiply (cost price without VAT) by 2.35 to achieve a gross profit of 50% which gives you cost price minus VAT, mark up by 100%, then add selling VAT a gross profit of 66.6% would require a markup of 200% of cost price (minus VAT) I'm not the best at maths so I am sure someone will correct me!

Hi Harry, Firstly most businesses address wholesale profit, rather than retail. However, I have sent you a PM (private message), which should give you exactly what you are seeking. Hopefully, this will also give you the flexibility to change the percentage profit margin, so that you can measure the resulting price change effect. Good Luck!

I ve been tryin to found out the formula for "percentage profit" can u plz help with this question here it goes Q: A shopkeeper buys 20 eggs at 15dollars. he finds that 10% of the eggs are not saleable but sells the rest at 20 Dollars a dozen, compute his percentage profit? could u plz give a solution??

A: Cost = $15 Sales = 18 eggs for $30 in total Profit = $15 (sales less cost) Percentage Profit = $15/$30 = 50% there, that was no too hard for anyone, was it ?

Get a life. I did not just give her the answer, and Mariam should either ask her tutor (or equivalent) these basic questions, rather than this business forum.

e.g. Sales £5000 Cost of Sales (materials/labour & overhead) £4000 Gross Profit = £1,000 or £1,000 divided by £5,000 = 20% gross profit margin If there are non-related costs (not directly associated with producing sales), say = £400, then final net profit declared will be £600, or 12% of Sales. Hope this helps

great thread guys - just one question :- In the calculation above "Percentage Profit = $15/$30 = 50%" is the $15 the original cost for the eggs or the profit made by selling them? many thanks, Chris

$15 is the profit made from selling the eggs. I can see the confusion, incidentally the profit and the initial cost are both the same. If anyone needs support for their business, I work for Staff India, do take a few moments to explore how we can help you. Regards.. Rob.