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So client has asked me to add an option to their website where they can apply margin markup instead of regular markup.

But all the formulas that I seem to be reading seem to know the revenue value in order to calculate the margin.

But I don't know the revenue.

https://www.omnicalculator.com/finance/margin#how-to-calculate-profit-margin

This calculator in the link above does not know the revenue, and simply calculates the revenue.

For example £1
Margin: 30%
Revenue: £1.43


So I need to know the formula that makes this 43% regular markup.

To arrive at a 10% margin, the markup percentage is 11.1%

To arrive at a 20% margin, the markup percentage is 25.0%

To arrive at a 30% margin, the markup percentage is 42.9%

To arrive at a 40% margin, the markup percentage is 80.0%

To arrive at a 50% margin, the markup percentage is 100.0%


Can this be made into a formula somehow?

joshmoto
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1 Answers1

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$$ \frac{1}{1- p_{\text{margin}}} = 1 + p_{\text{markup}} $$ where $p_{\text{margin}}$ is the margin divided by $100~\%$; and $p_{\text{markup}}$ is the markup divided by $100~\%$.

Matti P.
  • 6,012
  • So =1/(1-40%) = 1.66666667... i'm struggling to understand this formula can you help me out, maybe use operators. Lets say £1 is our unit cost, and we want add 30% margin, which should equal £1.43 – joshmoto Jul 04 '19 at 11:35
  • I think there's a mistake in the given data. My formula works for all of the other numbers. For example, $$ \frac{1}{1-0.1} = 1.1111 $$ which corresponds to the first data example – Matti P. Jul 04 '19 at 11:39
  • Wait you are on to something here! Thank you so much :-) – joshmoto Jul 04 '19 at 11:45