Mark up & margins (help!)
RyanW
Registered Posts: 19 New contributor 🐸
Can someone please help me on this topic. I just don't understand mark ups and margins??? Where do i start! Help is appreciated... thanks in advanced. If you could explain their principle and how to do them.
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Comments
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Hi,
Don't worry, it's easy.
If a business buys a product for £75 and sells it for £100, they make £25 profit, right?
The mark-up is the profit as a percentage of the purchase price, so in this case the mark-up is 33% (25/75).
The margin is the profit as a percentage of the sales price, so in this case the margin is 25% (25/100).
Make sense?0 -
[thread=26931]try this link[/thread]0
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Andy Blyth wrote: »Hi,
Don't worry, it's easy.
If a business buys a product for £75 and sells it for £100, they make £25 profit, right?
The mark-up is the profit as a percentage of the purchase price, so in this case the mark-up is 33% (25/75).
The margin is the profit as a percentage of the sales price, so in this case the margin is 25% (25/100).
Make sense?
Thats a good simple explaination. I've tried to explain it to senior mgt hear, once with no success. Definitely a tricky concept to get your head round.0 -
Thanks everyone! Putting it simple makes the books easier to understand... REALLY APPRECIATED!0
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