# Solved Gross profit margin with Vat

1. ## Solved Gross profit margin with Vat

Thanks all for help

2. ## Re: Gross profit margin with Vat

How much is algebra and how much is Excel and how much is financial theory.

I don't know financial theory, but it seems like VAT should just be included somewhere in cp. So cp=67+0.2*sp. Substitute into your existing formula for gp and you get
gp=(sp-mycost-0.2*sp)/sp=(250-67-0.2*250)/250=.532 (for the example given). Does that look right, or is there a different way to handle tax?

3. ## Re: Gross profit margin with Vat

Thank you Mr Shorty , with your help and one change i seem to have cracked it gp=(sp/1.2-mycost)/sp*1.2

4. ## Re: Gross profit margin with Vat

Re: Gross profit margin with Vat
Thank you Mr Shorty , with your help and one change i seem to have cracked it gp=(sp/1.2-mycost)/sp*1.2

In my own opinion, your formula should have looked like this: gp=(sp/1.2-mycost)/sp/1.2. The colour red aspect of the formula is your sales net of vat, which is what you supposed to use to get your gp margin.

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