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.


"Thanks. A great tool, easy to use."
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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