Calculate margin as profit divided by selling price (cost A2, price B2).
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=(B2-A2)/B2Subtract cost from price to get profit, then divide by the price for the margin. Format as a percentage. Dividing by cost instead gives markup, which is a different (usually larger) number.
=(100-60)/100→40%A $60 cost sold at $100 = 40% margin.
=(250-175)/250→30%A cost of 175 and a price of 250 give a 30% margin.
=60/(1-40%)→100The selling price needed for a 40% margin on a cost of 60.
Markup on cost
=(B2-A2)/A2Divides profit by cost instead of price.
Margin divides profit by the selling price; markup divides it by the cost, so markup is the larger figure.
Divide the cost by 1 minus the margin: =A2/(1-C2), where C2 holds the margin as a percentage.
Gross margin subtracts only the cost of goods sold. Net margin subtracts all expenses, including overheads and tax. The formula is the same; only the cost figure changes.
The cost is higher than the selling price, so the sale makes a loss.
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