I have a logic issue with calculating profit. I have a god damn degree in maths and can't see why one of the following is right and one is wrong! (by the way, I know which is the right one to use, I just don't know why!) Say I do a job that will cost me £1000. My logic says that to make 20% profit on that job I should charge £1200. However I also know that profit margins are calculated 'backwards'. Ie the profit margin given a £1200 bill to the customer of which £200 is profit is 200/1200 = 16.6%. I use the 2nd of these to analyse my business, but I can't see why the 1st isnt acceptable. Are they just arbitrary, so if either is used consistently then it doesn't matter, or should 1 be used over the other (pretty sure I know the answer!). If so, why! Please help a confused soul!