Welcome to the Forum!
Can you give a few more details about what you want? Or what data you have to start with? In its simplest form, if c is cost and p is profit then c+p is revenue and the profit margin is p/(c+p), markup is p/c.
Im estimating material cost and labor. At the base of the form there is a box for magin that is adjusted. I can calculate markup with a simple formula but margin becomes a circular reference.
I.E. Cost + Profit, what percentage of the sum total represents margin and that margin amount can be adjusted. The margin calculation I use now just adds a profit to the sub-total but does not reflect the overall margin for the job.
TOTAL COST $33,985
MARGIN 35% $11,894.75
TOTAL SALE $45,880
I'm not 100% sure I understand what you are trying to do. . . so I'll put down a few formulas to see if I'm close.
1. If you know what the total cost is (say $3,000) and you want to have a variable markup percentage that you can change (start with 35% like your example), then you need the formula for calculating the selling price. That would be Sell = Cost * (1 + markup) or Sell = 3000 * (1 + .35). Sell would calculate to $4,050.
2. If you also need to calculate your Profit Margin on the transaction, then use the second formula. Margin = (Sell - Cost) / Sell. This would be (4050 - 3000)/4050 = .2593 or 25.93%
3. If you want to make the Profit Margin a variable and calculate a new Selling Price then (using the numbers from #2 above) Sell = Cost / (1 - Profit Margin) or Sell = 3000 / (1 - .2593) = 3000 / 0.7407 = $4,050
If you want a 35% Profit Margin it would equal a selling price of 3000 / (1 - .35) = $4,615 . . . . 35% Profit Margin and 35% Markup are not the same thing.
Hope I got close to what you need... . . . Ralph
There are currently 1 users browsing this thread. (0 members and 1 guests)