+ Reply to Thread
Results 1 to 9 of 9

Margin calculation

  1. #1
    Registered User
    Join Date
    11-01-2009
    Location
    Cheshire, UK
    MS-Off Ver
    Excel 2003
    Posts
    3

    Margin calculation

    Hello. I have a selling price of X in one cell and a cost price of Y in another cell. How do I express this as a percentage margin in an adjacent cell? Forgive such a basic question but I'm new to this.

  2. #2
    Forum Moderator zbor's Avatar
    Join Date
    02-10-2009
    Location
    Croatia
    MS-Off Ver
    365 ProPlus
    Posts
    15,607

    Re: Margin calculation

    maybe like this: =X/Y-1

  3. #3
    Registered User
    Join Date
    11-01-2009
    Location
    Cheshire, UK
    MS-Off Ver
    Excel 2003
    Posts
    3

    Re: Margin calculation

    As an example, I tried this. A1 is 80 and B1 is 40. In accordance with your reply, I entered the following in C1:
    =(A1/B1)-1
    This gave an answer of 1 which is clearly wrong. Anyone else know how I do it?

  4. #4
    Registered User
    Join Date
    06-26-2009
    Location
    South Africa
    MS-Off Ver
    Excel 2003
    Posts
    74

    Re: Margin calculation

    The answer is correct. 1 represents 100% which is exactly the increase of 40 to 80.

    Looking at it logically - if 10% of 40 is 4, then the resultant is 44
    20% of 40 is 8, the resultant sum or increase from 40 is 48
    50% of 40 is 20, the resultant sum or increase from 40 is thus 40 + 20 = 60
    100% of 40 is 40, the resultant sum or increase from 40 is thus 40 + 40 = 80


    I use this formula all the time in my calculations ot determine % increases or decreases. To have it display as a %, just set the cell or column format to % and also set the decimal places you would like to see

    Another way to do this is (End Value - Begin Value) / Begin Value x 100

    Which would be (A1-B1)/A1*100

  5. #5
    Forum Expert shg's Avatar
    Join Date
    06-20-2007
    Location
    The Great State of Texas
    MS-Off Ver
    2003, 2010
    Posts
    40,678

    Re: Margin calculation

    Margin is 1 - cost/price, not price/cost - 1. The margin for the example is 50%.
    Entia non sunt multiplicanda sine necessitate

  6. #6
    Registered User
    Join Date
    11-01-2009
    Location
    Cheshire, UK
    MS-Off Ver
    Excel 2003
    Posts
    3

    Re: Margin calculation

    Thanks for your help. A1 is the selling price. B1 is the cost price. C1 is the margin(profit, expressed as a percentage). So if the selling price is 80 and the cost price is 40, C1 is
    =(A1-B1)/A1*100.
    The answer being 50%.
    Have I got this now?

  7. #7
    Forum Expert shg's Avatar
    Join Date
    06-20-2007
    Location
    The Great State of Texas
    MS-Off Ver
    2003, 2010
    Posts
    40,678

    Re: Margin calculation

    Yes, except there is no need to multiply by 100; 0.5 is 50%; and (A1-B1)/A1 = 1-B1/A1

  8. #8
    Forum Guru DonkeyOte's Avatar
    Join Date
    10-22-2008
    Location
    Northumberland, UK
    MS-Off Ver
    O365
    Posts
    21,531

    Re: Margin calculation

    yes, think of it as

    (net profit / revenue)

    where net profit is

    (revenue - cost)

  9. #9
    Registered User
    Join Date
    06-26-2009
    Location
    South Africa
    MS-Off Ver
    Excel 2003
    Posts
    74

    Re: Margin calculation

    Ok, excuse my misinterpretation - I interpreted what you were looking for in a similar manner as HPR or Holding Period Return where holding period return/yield is calculated as the sum of all income and capital growth divided by the value at the beginning of the period being measured ie. the growth of End Value from Beginning Value

+ Reply to Thread

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts

Search Engine Friendly URLs by vBSEO 3.6.0 RC 1