NEW MARGIN CALCULATOR
Free spreadsheet model
Say you are selling products or services at a gross margin of 40%, e.g.:
| Revenue | 2000 |
| Cost of Sales | 1200 |
| Gross Profit | 800 |
| Margin % | 40% |
To be competitive you need to discount, and are prepared to trade at a 30% margin. What's the maximum percentage discount you can give?
(a) 5.7%
(b) 10%
(c) 14.3%
Well it's not 10%.
It is in fact 14.3% - or more accurately 14.286%
And if the current sales price of an item is £2000.00, you can sell it for £1714.29 :
| Current Margin | 40.0 | % | Current price (ex VAT) | 2000.00 | optional | |
| Cost | 1200.00 | |||||
| Target margin | 30.0 | % | New margin | 514.29 | ||
| Discount / Increase | 14.286 | % | New sales price | 1714.29 | 30.0% | target margin |
The original spreadsheet model allows you to put your own figures in the yellow boxes. This covers both discounts and increasing your margin.
Vaughan Davies
Omnetica Ltd
If you would also like a copy just send us an email with "New Margin Calculator" in the message.
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