how do i set up a profit margin formula

wayne · External Since: Jul 23, 2006 Posts: 15

new to excel-- i would like to set up a formula to calculate the margin
percentage.

ex -- cost divided by retail= markup, markup divided by 1. the markup

1.00/1.50 = .667

.667/1.667=40% gross margin

Eduardo · External Since: May 04, 2006 Posts: 208

Hi Wayne,
In your example the margin is 50% not 40% the formula to use is

Cell A1 = Selling price
Cell A2=Cost

=1/(1+(A2/A1))

other way is to simple deduct the cost from the Selling price divided by 100
=(A1-A2)/100

"wayne" wrote:

> new to excel-- i would like to set up a formula to calculate the margin
> percentage.
>
> ex -- cost divided by retail= markup, markup divided by 1. the markup
>
> 1.00/1.50 = .667
>
> .667/1.667=40% gross margin

Bob I · External Since: Dec 30, 2004 Posts: 633

=(A1/B1)/(1+(A1/B1)) format as percent

wayne wrote:

> new to excel-- i would like to set up a formula to calculate the margin
> percentage.
>
> ex -- cost divided by retail= markup, markup divided by 1. the markup
>
> 1.00/1.50 = .667
>
> .667/1.667=40% gross margin