gross markup formula....

[whynot83706]

Can someone please explain me what is correct formula in the excel.....I need to markup or increase A1 for 30%

A1=16101.35
=A1*1.3 and that is 20931.75 (B1)
when I go to check =1-(A1/B1) i get 23%

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A1=16101.35
=A1/0.7 and that is 23001.93 (B1)
when I go to check =1-(A1/B1) i get 30%

So what is correct?

[shg]

Please edit your thread title to be descriptive of your problem.

[Leith Ross]

Hello whynot83706,

If you are referring to markup as in the retail sense then your formula should be...

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Sincerely,
Leith Ross

[shg]

Thank you from the new title.

This formula is for the sell price as 30% markup on cost:

=(1 + 30%) * A1

This formula is for a 30% profit on the sell price based on cost:

= A1 / (1 - 30%)

As you've found, they are different.

[whynot83706]

Hello whynot83706,

If you are referring to markup as in the retail sense then your formula should be...

Please Login or Register  to view this content.

Sincerely,
Leith Ross

I guess it would be in the retail sense because I am trying to see 30% gross margin.
I am confused with =(B1-A1/A1) i get 20930.76??? Because B1=A1*1.3 is 20931.76

[Leith Ross]

Hello whynot83706,


That is the formula for gross markup:

Sales Price = Cost * Markup
GMP = Sales Price - Cost/Cost

If you enter the formulas and values correctly then C1 should show 0.3.

Sincerely,
Leith Ross

[shg]

I am confused with =(B1-A1/A1)

It's wrong on two counts.

First, the parens should be (B1-A1)/A1

Second, gross margin is (Price - Cost)/Price not (Price - Cost)/Cost, so the formula should be =(B1-A1)/B1, or equivalently, =1-A1/B1