Finance


Do The Math - Mark-Up vs. Margin



With MARK-UP, you are looking for the 
Percentage of COSTS

                  Selling Price - Costs
MARK-UP= ________________
                             Costs

With MARGIN, you are
looking for the

Percentage of SELLING PRICE

                 Selling Price - Costs
MARGIN = ________________
                        Selling Price


To find Selling Price (SP)
At a given MARK-UP (MU)
When Cost (C) is known

(1 + MU%) x C = SP

Cost is $2,500
MARK-UP desired is 30%

Selling Price is
(1+.30) x 2,500 = $3,250

To find Selling Price (SP)
At a given MARGIN (M)
When Cost (C) is known

C/(1-M%) = SP

Cost is $2,500
MARGIN Desired is 30%

Selling Price is
2,500/(1-.30) = $3,571


MARK-UP to MARGIN Equivalents

MARK-UP
250%
200%
100%
80%
75%
50%
40%
33%
30%
25%
20%
15%
10%
5%
0%

MARGIN
71%
67%
50%
44%
43%
33%
29%
25%
23%
20%
17%
13%
9%
5%
0%




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