Formula to determine selling price with cost known @ X margin?

R

rg2

I'm trying to create a formula in Excel to project a selling price of a
product using the margin I wish to make as the variable. Any help would be
greatly appreciated.
Thanks.
 
R

Rick Rothstein \(MVP - VB\)

I'm an engineer-type person, not a business-type person; but, as I
understand the terms, I think you want this...

=A1*(1+B1)

where A1 holds the price you paid for the item and B1 holds the margin as a
fraction (0.30 for 30%).

Rick
 
H

Harlan Grove

I'm an engineer-type person, not a business-type person; but, as I
understand the terms, I think you want this...

=A1*(1+B1)

where A1 holds the price you paid for the item and B1 holds the
margin as a fraction (0.30 for 30%).
Click to expand...
....

That's mark-up. Margin is expressed as a percentage of revenue, not
cost of goods sold. Given your set-up, the correct formula is

=A1/(1-B1)

Another way to think about it: you can't have more than 100% margin,
but you can have more than 100% mark-up.
 
R

Rick Rothstein \(MVP - VB\)

I'm an engineer-type person, not a business-type person; but, as I
...
That's mark-up. Margin is expressed as a percentage of revenue, not
cost of goods sold. Given your set-up, the correct formula is

=A1/(1-B1)
Click to expand...

Damn! I mixed them up. Thanks for the correction Harlan... much appreciated.
Another way to think about it: you can't have more than 100% margin,
but you can have more than 100% mark-up.
Click to expand...

You know, if I had thought of about it that way, I probably would have
gotten it right.

Rick
 
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